Envelope Budget: An envelope budget is a budget where you assign money to each category and deal with cash for several of your expenses. You take the cash out for each month and put the money into different envelopes labeled for the category. When you run out of money in that category, you stop spending. This is a good strategy if you are not good at tracking your expenses. Most people still pay their bills online through their checking account. In order to make this work, you cannot use your debit card for the categories that you have envelopes for.
Learn to Reduce Spending. Developing your budget will help you spot areas where you're spending more than you realized. But the next step is more difficult: cutting your spending on unnecessary items. This will require some soul_searching on items both large and small. For example, do you really need a ŭ coffee every morning? (Some will say yes, while for others the answer is no.) Could you make do with a smaller, older car? Instead of an expensive vacation this summer, could you try a "stay_cation," where you stay home (much cheaper) and relax there? All these choices are very personal and many factors come into play, so there's no right answer for most of them. But laying them out will help you prioritize your spending, and that will help you spot places where you can save money.