If you are finding it difficult to stick to your budget you are not alone.

Writing a budget is easy, but following through is another issue entirely. If you’re having problems sticking to your budget, then the envelope method of budgeting is what you need.

What is exactly is this envelope method? You may ask!

The envelope method means that you set aside cold, hard cash for the different categories of your budget in separate envelopes. Here’s how to use the envelope method:

Have a monthly budget

Take out your savings and investments, then write out everything you’ll have to spend money on during the month. That includes your bills, food, entertainment, transportation, etc.

Divide your money and place into envelopes

Buy the envelopes, and put the amount you budgeted for each category into the envelopes. Label the envelopes per category to avoid confusion. Then withdraw the total amount you’ll need and put the money for each item into the specified envelope. You can further split the money for transportation into 4 different envelopes and label them for week one to four.

Keep the envelopes in a safe place

Stash the envelopes in your secret place. You should keep your ATMs away from your reach to help you stick to the envelope method. Hiding your ATMs also helps you resist the temptation of impulsive spending.

Go back to the cash economy

With the envelope method, you can use cash only when you want to buy anything. When the envelope allocated to a budget category is empty, spending on that category is closed for the month.

The envelope system helps you stick to your budget because you can see how quickly your budgeted money is dwindling and that you should curb your spending. Try it out and let us know how it works.