The Cash System

The way banks have over-leveraged themselves, it is wise to consider minimizing your exposure to the banking system. Just as you would be unwise to put all your assets in one investment, consider diversifying outside of banks. Hold some cash for transactions, instead of relying on credit or debit cards for everything. Hold some savings in gold. (A good way to do that is to use an "online gold" bank, of which I think the best is Goldmoney.com.)

Instead of taking out cash when needed, consider the reverse. Keep a minimum amount in the bank, hold basically all your money for transactions in cash, and put money into the bank to pay bills.

There is some evidence that using the cash system will help in the budgeting process. It gives you a good idea of how much money you have at any given time, and it imposes a psychological discipline on spending, called the denomination effect. Basically, you're more reluctant to break a $100 bill than you are to break a twenty.