In the past, I've tried to put cash in actual envelopes. I never was successful keeping it all straight. Plus, I'd have to physically go in the bank and ask for x number of $5 bills, x number of $1 bills, etc. (Ok, I'm lazy...I prefer to use the drive thru.) Even figuring out how many denominations I needed got confusing. In my book, if it's not easy to use, it fails. I'm all about easy.
The EEBA system uses virtual envelopes. You determine what "envelopes" you need (groceries, gas, eating out, etc.), then assign a monthly budget amount to each of those categories. I prefer to use the Android app to keep track of mine, so I will show some screenshots (taken from the Android market).
This shows the virtual envelopes this person has set up. On the far right, it shows what the budgeted amount is for that category (the bottom number), and the remaining balance in that category (the top number). Hmm, looks like they've spent too much on the kids...red is never a good color! Anyway, whenever you make a transaction, you record it. You are prompted to assign an amount to the transaction, then select which "envelope" your expense came from. The program allows you to split your transaction into multiple categories, as shown in this image:
It's that easy! Now there is a record of all your cash expenses right at your fingertips.
Now there's no need for figuring out what dollar bills go in which envelope. Keep all your cash together (in one envelope, if you like). And when you need to know how much you have left to spend on gas for the rest of the month, EEBA will tell you.
You may prefer using the website. If you use both, there is a sync button to keep all your information up-to-date on both devices. But which ever one you use...use it! It's a big help in keeping your spending in check.