- Use the envelope system to limit discretionary spending.
- Once a month or on payday, put money in envelopes for eating out, clothing, entertainment, etc.
- Once the money runs out, the spending stops.
ROANOKE – If you have a hard time sticking to your budget, the envelope system may help you stick to your spending and savings plan.
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Each payday or at the beginning of each month, get cash for your discretionary spending, things like eat out, clothes, shopping and entertainment and put it in an envelope.
When you buy these items, pay with cash from the envelope.
Once you're out of money, the spending stops.
"When you hand over a plastic card, whether it's a credit card or a debit card, there's no feeling behind that. It's easy to do, it's easy to swipe. There's no pain. It's called the pain of paying. Cash on the other hand has a little weight behind it. Take a $100 bill out of your wallet and try to hand it to someone and there's feeling behind it. You don't want to let go of that $100 bill.
Tim Cerebe, Freedom First Credit Union
Any money you have left over at the end of the month, move that into savings or use it to pay down debt.