Early this year I saw this awesome tutorial on making cute envelopes for budgeting purposes. I used this method for all of January and was very pleased with the results. It is much harder for me to spend big wads of cash than it is for me to throw everything on the debit card pell mell.
The system also makes it more necessary for me to write out my meal plans for the week and stick to my list at the store.
I like this method because I always know exactly how much money is left, and how long it has to last. It's funny how such a small thing as the method of spending can shift the pendulum from slight over-spending to slight under-spending.
In a sort of related note, check out this interesting graphic on consumer debt in the U.S. vs. other countries.