– If you’re trying to execute a budget for the first time and find yourself overspending on discretionary categories like food and entertainment, using cash, organized into envelopes by category, may be the way to go.

– Organizing those cash envelopes is easy, and it provides immediate feedback on your spending.  OK, I’ve got 1 week left in the month and $100 left in the food envelope.  Also, various studies have shown that when using cash, you spend 10-20% less than when using a card of some sort.

– When just starting out with cash envelopes, keep it simple – two to four categories will do!  Don’t overcomplicate it.  Get the money to fill the envelopes from the bank at the beginning of the month, then use the cash in those envelopes to fund your purchases in that category.  Good categories for cash include spending money, food, entertainment, clothing, fuel, miscellaneous household expenses, gifts, and date night, among others!