Start Accumulating Cash to Cut Your Expenses

From hidden lifestyle costs to the blatant costs of inflation, it’s all too easy to watch your spending spiral out of control. And if your primary spending method is a credit card, it’s just as easy to get into serious debt. One of the simplest, but often overlooked, strategies for sticking to a budget is putting money into envelopes. Here’s how cold cash can help you cut costs and get another portion of your debt.

Where to start throwing money

The money-filling method, the “envelope system”, is commonly attributed to finance guru Dave Ramsey . Here’s the basic idea: you have different physical envelopes for different expenses, and you fill each envelope with the amount of money budgeted for that month (or payment period).

Of course, this means that the first step to stuffing money is budgeting . You need to determine which expenses require an envelope and how much cash is included in each. General categories for cash filling include groceries, entertainment, restaurants, gas, rentals, etc.

The bottom line is that you can only spend money in a certain category from a designated envelope. Once the envelope is empty, it will be a month.

Filling with cash works because it forces you to be more deliberate (deciding how much money goes into your envelopes) and more disciplined (you can’t put more money in an envelope when it runs out).

bottom line

Using cash for budgeting is nothing new. As we’ve said before , and as you’ve probably noticed in your life, touching money and giving it hurts inside your brain. So if you need a mental boost to stick to your budget, a physical blank envelope is much more powerful than checking your online bank account.

Of course, cash isn’t exactly king these days. Carrying envelopes with cash is too risky for some, and many establishments have switched to cashless payments. You do not need to switch to cashless payments – it is important here to create a specific system for tracking and controlling your expenses.

Even if you don’t apply cash topping to your entire budget, using it for some expenses will help you see where your money is going (literally). If you’re struggling with reckless credit card swiping, the envelope system is a good place to become a more conscientious spender . After all, physical handling of cash is a powerful psychological tool to curb impulsive spending.


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