Your budget isn’t working? | Managing your money the old-fashioned way may be your best solution


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There are so many people who’ve tried every budgeting tip and trick in the book but still can’t seem to figure out how to handle their money by themselves. It’s just not a natural tendency for most people.

If you’re in this situation and maybe have been for a while, there’s a “scared straight” kind of technique that I want you to try. It’s a real throwback to a different era — but it’s proving to still be very successful today.

The strategy is pretty simple: pay in cash for whatever you can, using envelopes to divvy up your money and keep you within budget.

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How to make a cash-only budget work in your life

My General Manager Christa made it clear to me about eight or 10 years ago that she had trouble with money just vanishing out of her life. Then she hit on the idea of putting money into different accounts for different purposes.

Today she has three separate checking accounts and one savings account. She has each of her paychecks automatically split among these four accounts each month. Christa then uses to track her finances online (and using the mobile app) for free.

Depending on your bank, you may not have the ability to sync your accounts with Mint, however there are plenty of free budgeting tools and apps out there for you to try.

Check out our Budgeting Guide for a list of great apps that can help keep your money on track.

The envelope method

Of course, a low-tech way to get a handle on your finances would be the envelope method.

You simply take envelopes and write “groceries” on one, “utilities” on another, “walking around money” on a third — there should be a separate envelope for each part of your life that requires money.


I often tell couples to do this particular method of budgeting to keep them on the same page throughout the month.

I once sat down with a couple that had more than $30,000 in credit card debt. We came up with a 30-month plan for them to get out of debt that involved the envelope method. They didn’t think it would work, but they extinguished their credit card debt in 21 months!

Plastic makes spending too easy

Debit cards and credit cards can be the Bermuda Triangle of your wallet because it’s so easy to lose track of your finances when you use them. A study done by Dun & Bradstreet found that people spend 12% to 18% more at fast-food restaurants when they use plastic instead of cash.

It makes sense. When you swipe a card, you don’t feel the money leaving your hands like you do when you hand over cash.

That’s why I recommend that on payday, you take out the dollar amount you need until next pay period and split it up among your envelopes. When one envelope empties, you either take money from another envelope or you do without until next payday.

If you’d rather do it the digital way, just set up separate accounts — and then use a budgeting tool or app to track your progress throughout the month. Some apps will even alert you when you’re close to reaching your limit for a specific category, so you can shift money from another category or find ways to cut costs until the next pay period.

This is a simple method that will bring more control to your life than any tool that claims to be the “secret to financial success.”

Whatever method works for you — be it low tech, high tech or somewhere in between — this is the one I want you to adopt.

More resources:

5 basic money rules you can live by forever

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