Making a budget is one thing. Living by it is a different matter. If sticking to a budget is a challenge for you — or if you’re just a visual person — an envelope system might be for you. It takes the cash only system to the next level.
Of course, you’ll still need to make your mortgage or car payment by check, or online or mobile banking. For other spending, list each category and the amount you’ve budgeted per week or month. Then make an envelope for each and place the budgeted amounts in the envelopes. For example, you might have an envelope for:
- Doctor visits/prescriptions
Whether you’re dining out or picking up a prescription, just use the cash from the corresponding envelope. Place any remaining cash from each envelope in a savings account at the end of the month.