How to build a budget seems to be a common question for people in debt. Seems easy but what I've found from talking to people it's not the actual drawing of the budget it's sticking to it that's tough. So perhaps cash would work best to keep people from overspending.
But what I've found the major problem for people in debt, is budget busters. What's a budget buster? Well a too large mortgage payment, excessive car payments, large CC minimums, or huge student loans. Usually I've found that people are not overly spending on eating out, buying things, etc.
But those budget busters are something which society calls acceptable. Like stretching to buy a house that takes up 30-40% of your pay. Or cars which cost 25-50% of your salary. Or student loans 3-4x your income. These budget busters are all considered acceptable by normal standards.
Sure I think student loans, mortgages, and even car loans have a place in a financial plan. But not when they are budget buster. Not when you cannot afford to budget because there isn't enough money to cover basic living expenses. Then you've overspent.
Cutting lattes, cigs, eating out, cable, internet are nice solutions to trim a budget. It would save me $300/month. BUT that's barely a car payment, monthly property tax, or student loan payment. So you'd be better off cutting one of those big ticket items to make your budget really work, then trimming the fat.
There is nothing anyone can do to make a budget stick if 100% of the salary is gone to a car, house, and student loans, before you even get to food, clothes, and fun. But maybe I'm looking at most people's budgets the wrong way.