You’ve probably heard of the cash envelope system; it’s nothing new. But unless you’ve put this budgeting strategy to use in your own household, you may not know the details of exactly how it works and how it can help you gain control of your finances. Read on for a step-by-step guide on how the cash envelope process works.
The basics of the envelope system
The cash envelope system is not just one envelope stuffed with cash. Rather, your budget gets broken down into various categories. Each category has corresponding envelope. Inside, each envelope holds the allotted amount of cash for a specific category.
If you’re like nearly half 50% of all Americans, you experience stress related to money—not having enough; spending more than you make; struggling to manage expenses, feeling like you just can’t get ahead. No doubt about it, financial-related stress keeps a lot of us up at night.
There are countless strategies to mitigate money stress, but the simplest of all may be adopting a cash lifestyle. This means you pay for everything you possibly can in cash. Cash works because it forces you to plan and get in control; you’re limited in purchasing power to just what’s in your wallet.
A cash lifestyle forces you to evaluate what you truly need. And, with practice and discipline, you can sleep better at night knowing where every dollar is going, reducing stress and anxiety.
ROCKVILLE, Md. — Even in the digital age of virtual wallets, ecommerce, mobile payments and online banking, cash is still king, a new report from market research firm Packaged Facts found.
According to U.S. Consumer Payments Outlook Through 2020, 79 percent of consumers made monthly cash payments despite the wide range of plastic and virtual alternatives in 2016.
As consumers encounter a growing array of ways to pay – from cash and cards to mobile wallets and person-to-person (P2P) apps – a ‘new norm’ is emerging as consumers embrace a blended mix of payment options in today’s fragmented payments landscape.
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