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In 2019, around two-thirds of Americans used a budget of some kind.

Having a budget is all well and good, but you may have a budget and still find that your finances are spiraling out of control.

The good news is that the key to better budgeting is simply finding the right budget for your needs.

If other budgets haven't work for you, then it's time to consider a cash-only budget.

What Is a Cash-Only Budget?

A cash-only budget is exactly what it sounds like. You pay for as many things as you can using only cash, and stop using debit cards or credit cards.

It's a simple but effective plan to budget by taking out specific amounts of cash at the start of the month and using only that cash for payments.  This way, you can physically see how much money you are left with and will be unable to overspend without breaking your budget.

Let's take a closer look at how it works.

Choose What to Switch to Cash

Firstly, you need to decide what payments you will switch to cash.

Ideally, this should be as many as you possibly can to get the most benefit. There may be some payments, such as your mortgage, that you cannot switch to cash. Everything that you can pay by cash should become part of your cash-only budget.

Work Out Your Budget

If you've been using a budget planner already, you'll have a reasonable idea of how much you spend each month in various categories.

If you haven't, then take a look through your bank and credit card statements, and create a monthly budget for various categories. You'll need to decide on these yourself, but common categories include groceries, travel, entertainment, eating out, gifts, and health.

Take Out Cash and Put It in Envelopes

Once you've worked out how much you want to spend in each area for the month, you take out exactly that amount of cash and put it in an envelope.

Repeat for each category, and make sure you carefully label each envelope so that you don't end up mixing them up.

Spend Your Cash

Now anything you spend needs to be paid for with cash from your envelopes.

As the cash in each envelope reduces, you will have a visual indication of exactly how much you are left to spend in each area. For instance, when the Dining Out envelope is almost empty, the answer to 'should we just get take out?' becomes straightforward.

Once the envelope is empty, and you need money on an urgent basis, you can either take out the required cash or borrow hardship personal loans instantly.

Adjust Your Budget

At the end of the month, you'll know which envelopes had cash left over, which were just about right, and which ran out way too fast.

You can then rework your budget to make adjustments. Remember that if you want to be successful at controlling your money, you may need to adjust your spending rather than just your budget.

Ready to Go Cash Only for Better Budgeting?

We hope that this article has given you some insights into better budgeting using a cash-only system. If you've struggled to get on with other types of budgets, this method may be the one you've been looking for.

For more great advice on how to budget better and other lifestyle topics, please be sure to check out the rest of the site.