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I’ve said it before and I think budgeting is basically useless when it is too detailed. If you budget a certain amount for every little item then you will eventually overspend on something and feel like you’ve failed. The problem is it’s just too inflexible.

I support the 60% solution which is a great way to split your income. But I think it’s important to hold cash for the 10% of funds that you spend anywhere, anytime.

The problem with today’s spending habits is that it’s too easy to buy. You don’t need cash now, you don’t need to plan, all you have to do is throw them a credit card and poof, that diamond encrusted cellphone is now yours. Instant satisfaction. Instead you should take out your disposable funds once per week in cash. This way you can see how much you have left to spend anytime you look in your wallet.

It also makes it harder to spend. You’ll find that you will run into purchases you want to make only to find you don’t have the money to buy them. But after you go home and sleep on it, you often realize that that new video game was just an impulse. So take cash, spend less, spend smarter and become rich.

What are some of the tips you use to manage your finances? And send us an email if you have a post that you think would be a great addition to livvit.com at – livvitco@livvit.com.