Traditional Approach: Cash Envelopes for all your Spend Categories _ One past useful money budgeting technique was to set up your saving and bill paying system using cash envelopes. Basically the cash envelope system consists of keeping separate envelopes for your spending categories and populating them with cash from your income source. Then when a bill comes due or you need to go shopping for food or an item you need, you simply pay for it with cash from the appropriate envelope _
If you don't allow for a certain amount of mad money for you and your spouse soon resentment will start to set in. Each party will get very frustrated about having to stick to such a strict budget and not having any money for fun. Likewise, even if some money is allocated in the budget for fun, one of the partners may get tired of not being able to spend some money how he or she would like. This special money even allows you to save some money for a larger purchase you may want to make. _ Even if money is extremely tight in your monthly budget, it is highly recommend to allow each spouse a small amount of mad money to help make the budget work. Everyone is more willing to save and track their spending if they are allowed a certain amount of mad money to spend how they wish.