In this economy cutting spending and saving in an emergency fund is crucial. There are many useful ways to manage your finances that will be discussed at my website,, but one of the easiest to implement is the cash budget.

The best way to implement any budget, including this one, is to track your spending for the last month. You can then review what you spent, note which items should not have been purchased, and adjust your monthly spending accordingly. But there's a quicker, easier way. Just guess...

Never, ever allow yourself to spend more than what's in your walletYou know how much money you could save if you brought lunch from home a few more days a week. You know how much extra green you could have in your wallet if you rented a movie instead of going out every once in a while. So guess how much money you should be spending in a given week. Don't include unusual circumstances or big ticket items; this method isn't useful for handling those expenses. Just calculate what you think you should be spending on coffee, groceries, gas, meals, and entertainment every week. We'll call this your Green Number.

Congratulations, the hard part is over. Now all you have to do is:

1. Put your Green Number (in cash) into your wallet.

2. Take out all your credit cards and put them somewhere safe.

3. Enjoy your week.

Every week from now on, add that much money to your wallet. If you never seem to run out of cash, your Green Number may be too high. If that's the case reduce, reduce your number. If you always come up short at the end of the week, one of two things may be happening: (1) you may be spending too much money, or (2) your number may be too low. Only you can decide what is essential in your life. If you're spending too much money, I encourage you to go to my website for more cost-cutting tips. If your guesstimate was simply unrealistic, adjust your Green Number slightly up and try again.

Unlike spending with credit cards, you can always instantly see whether you're likely to maintain the budget for the week when you spend with cash. This helps you see whether you can afford an impulse buy, or you need to curb your spending to make it. However, budgeting with cash doesn't appear to work as well when you budget for time periods longer than a week because it makes it easier to promise yourself you'll reduce spending later. After all, who really knows what they're going to do every day for the next month?

The most important part is to never, ever allow yourself to spend more than what's in your wallet on ordinary purchases. You picked your Green Number by thinking and calculating. People make impulse spending decisions without as much consideration. By refusing to refill your wallet until next week, you'll develop good spending habits naturally.

Note: This article is solely personal opinion and does not offer legal or financial advice. Every person's situation is different. Please consult with a legal and financial professional before making financial decisions.