Popularized by personal finance guru Dave Ramsey, the cash envelope system encourages you to toss aside your cards and rely solely on pre-labeled envelopes full of real, physical money.
Here’s how it works: 👇
◾️Take out a set amount of cash at the beginning of each week.
◾️Set your budget, and divide the cash up accordingly.
◾️Put the cash into labeled envelopes for each of your weekly spending categories. (This shouldn’t include fixed expenses like your rent or monthly car payment — it’s OK to continue paying those your usual way.)
◾️Use only the allotted amount of cash in each envelope for that category of spending
Once each envelope is empty, that’s it — no cheating by whipping out a card to buy that new shirt.
The envelope method will help you better visualize your spending habits, and having tangible limits will help you reign in your swipe-happy tendencies.
Would you try this method? If you have, has it been successful?