One of the biggest reasons for financial failure is that most people don’t know where their money is. They spend, spend, and don’t even keep track of how much they are spending or where it is going. The cash-envelope strategy can help you to stop overspending, get out of debt and start saving money for the future. The cash envelope system has been around for a long time. Our grandparents and great-grandparents used the cash-envelope strategy, and it worked very well. Its simplest form consists of envelopes labeled with different categories: housing, utilities, groceries, eating out, clothing, etc.

Each month you would withdraw cash from your bank account to fund these different categories and put the money in the corresponding envelopes. Then you would not be able to buy things in the stores unless the cash was in that category envelope. This may sound too simple to work, but it works very well. The keyword here is discipline; it takes discipline to use the system correctly, but once you get in the habit of using it correctly, you will find that you are saving more money than

ever before. You will be spending less because you will be aware at all times.