Keeping Envelopes Handy with a Cash Budget

Greg and I jumped on the Dave Ramsey band wagon a few months after being married. We quickly paid off all our debts began an emergency fund and have since than been a little fanatical about our finances and keeping a tight budget. Our budget has changed over the years and we seem to always tinker with it. We first started out with an all cash budget using envelopes, we had an envelope for gas, groceries, clothes, entertainment, you name it we had an envelope for it. We've learned to simplify things a bit since those first few months. It's not real convenient to carry envelopes of cash around and we always felt uncomfortable having a month's worth of cash sitting in my purse. Once we tried forgoing using cash, but realized it was harder to stay on budget. After examining things we realized the two categories that seemed to be overspent if left unchecked were groceries and entertainment. Now we only take out cash for those two things, once the cash is gone it's gone. This method has simplified our budget, we stay on track and we don't hassle with too much cash.
I like to keep the two envelopes on the fridge and take out only the cash I need. With the envelopes in a permanent spot I never worry about where I put the money last. I also store the month's receipts in the envelopes. It's the best of both worlds-the restriction of cash where needed and the convenience of a debit card for all else. It works for us.

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