Old-fashioned budgeting helps stop overspending

Published: March 25, 2019

Dave Ramsey

Dear Dave,
I’ve listened to you for a little while, but I was wondering about the envelope system you recommend. How does it work?
Danielle

Dear Danielle,
Don’t let the word “system” intimidate you. It’s just grandma’s old-fashioned, common-sense way of budgeting money.
Back in the day, many people were paid in cash at their jobs. Then, they would take the money home and divide it up into different envelopes. The envelopes held cash for different categories in their budgets — food, clothes, rent, and other bills and such. When a particular envelope was empty they stopped buying that item, because the money budgeted for that category was gone. If you wanted a dress, but the clothing envelope was empty, you didn’t buy a dress that month.
It’s just a simple cash system that, combined with doing a written monthly budget, will help keep you from overspending!
—Dave

Dave Ramsey has authored seven best-selling books, including “The Total Money Makeover.” The Dave Ramsey Show is heard by more than 14 million listeners each week on 600 radio stations and multiple digital platforms.