Two and a half years ago when I first read Dave Ramsey's book Total Money Makeover, I started using the envelope system. I probably used it for about 6 months and then decided that it just wasn't working for me.
My biggest problem was when I was at a store and would have a purchase that required money from 2 different envelopes. I'd come home and try to figure out how much money I owed which envelope.
It all seemed way too confusing and like too much work. I decided a debit card would be way easier, so I got one.
In February, I went back to the Envelope System.
For those of you who don't know what this is, I'll explain.
Basically, figure out your budget and certain categories are cash only. You take that money, put it in an envelope and you can only spend what is in the envelope. If the cash isn't there, then you simply can't buy it.
There is just something great about going into a store and paying cash.
I still remember a couple years ago when I had saved up for a few months with my clothing fund and then headed out to the outlet mall. I had tons of bags full of clothes and it felt so great knowing that it was all paid for. I didn't have to go home and check how much I put on my debit card to see if I went over budget and I also didn't get a credit card bill in the mail the next month. It was a big shopping spree with none of the guilt!
I have envelopes for Adult Clothes, Kids Clothes, Groceries, Household Items, Gas, Date Nights, Entertainment, Dining Out, Babysitting, and a few others as well.
When you are paying cash, you think more about your purchase because you only have a certain amount to spend. Once it's gone, it's gone. You spend wisely.
If you don't believe me, I challenge you to try it. Try it for 2 months and see if it changes how you spend.