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5 Ways to Cut Your Monthly Living Expenses

Go With Cash

It's kind of an old-school approach to cutting expenses, so old that some people have forgotten about it. Maybe it's time to bring back the envelope system.

Once you're organized, you can divide your paycheck by category: entertainment, gasoline and food, for example. Decide how much money you're willing and able to spend for each category [source: Ramsey]. Put that amount of cash in the correspondingly addressed envelope. When your entertainment cash is gone you can't swipe a debit or credit card. If you've nearly spent the cash in your gasoline folder, you avoid taking that last-minute excursion out of town.

How does the envelope system cut your monthly expenses? By erasing the illusion created by that plastic in your wallet that there's always a little extra that can be spent. An envelope doesn't have an expanding and tempting credit limit. When it's empty, it's empty.