The envelope method budgeting strategy popularized by money expert Dave Ramsey is a handy way to adopt a cash-only life. And you don’t need a lot of cash on hand to get started with the envelope method. Just begin when you get paid.
As soon as you get your paycheck, set aside enough cash to cover your expenses. Figure out your spending categories — groceries, gasoline, meals out, entertainment, etc. — and create a separate envelope for each. Write the category title on the envelope in large letters. Then, put the amount of cash you need for each category into its corresponding envelope.
When an envelope is running low, make do with what you have until you get paid again. No money can be transferred from one envelope to another — you have to wait until your next paycheck comes in before you can refill each envelope.
“Cash doesn’t offer overdraft protection,” said Greutman. “When the grocery envelope is empty, you eat leftovers.”
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