Cash Envelopes
The cash envelope allows you to specify how much you are going to spend in a given period of time. Fill the envelopes for the week or weekend and when it’s gone… it’s gone. This will be quite an adjustment for some in the beginning, but in time it may help to illustrate how you are spending money. For many, it is a huge eye-opener.
The attached cash envelope template (Download Cashenvelopes) allows you to print, cut, and fold your own envelopes. They are just big enough for some cash and we even made a little pocket for receipts. We made sure to include a register, of sorts, on the front so you can log your spending if you wish.
Things to consider:
Be sure to budget wisely. The idea is to have some limits, but if you are too ambitious you may have to go without or go get more money which could leave you feeling defeated.
Understand that there will be exceptions. This does not always keep you from spending money, but it does raise the level of awareness.
If you go a week without using your debit card, take that time to really balance your checkbook register. The absence of $3.00 coffee purchases will make it easier to tackle.
This method and template could easily be adopted to dole out allowance or holiday shopping money. It is a great way to show kids how to manage their own money.
If you are thrifty enough to actually have money left over at the end of the period, reward yourself by adding it to the next period's pot or, better yet, tuck it away in savings.
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