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If you've tried many different budget methods and can't seem to find one that works for you, you might want to try something drastic: going on an all-cash diet.

The idea of using cash is so old-fashioned that it might be just what you need to get yourself out of your financial funk. Using cash has its downsides: no interest on the money, having to go to the bank or ATM to get it out, and the liability of carrying a large sum around are a few that come to mind. For those downsides, there is one major upside: when you live on an all-cash diet, you can't spend more than you have.

There are some aspects of our financial lives that require money in forms other than cash. A few examples include paying your mortgage, booking a hotel, or taking the proceeds from a person-to-person loan on Lending Club. Even these items can fit into your all-cash exercise. If you are taking your entire paycheck out in cash, then you will probably have to deposit some of it back into your account to cover checks that you write for your mortgage, etc. It may seem like a futile exercise to take money out, only to put it back in later, but this will give you a good sense of how much each of your expenses is really costing you. Seeing a huge portion of your paycheck getting deposited to cover your mortgage may lead you to rethink the type of house you're living in. Using cash, if only for a short while, can really help you to see where you're living beyond your means, and where you’re not.

There are many cash-based budgeting methods, but the most well known is the envelope method. Here's an overview. The same reasons that it’s better to give a kid a piggy bank than a savings account apply here as well. Sometimes holding money in your hand can help you appreciate its value more and get you to make smarter spending decisions.

Once you get better at money management and tracking where your cash goes, you can slowly migrate back into the cashless society. Meanwhile, the lessons learned from your all-cash diet can easily be applied to your regular finances.

Does anyone still call their stock broker? A number of new start-ups hope you’ll turn to their online communities instead of picking up that phone. And even with the turmoil on Wall Street, financial start-ups are growing like weeds, though many Americans’ portfolios are not.

From free trades to social lending, these companies are changing the way we interact with Wall Street and our portfolios. Who would you rather trust: an online investment community or your stock broker?

Investment Web 2.0 Style

Cake Financial – Their logo says Alpha, but Cake is slick. Cake aggregates your investment portfolios and allows you to compare and track your performance against that of the cake community. Setup takes 5 minutes. If you’ve ever been curious to see what other real investors’ portfolios look like, Cake makes it easy. I’m beating the market….though still down for the year. Crap.

Covestor – Do you ever dream of running a hedge fund? Covestor gives you the investment opportunity of becoming a money manager right from your bedroom. From their website, Covestor is:

“A real-trade sharing service for proven self-investors. To share your real investment decisions, gain recognition and earn fees by helping others.”

Only active traders are allowed to earn fees, and there are some obvious legal questions regarding giving stock advice. But if you’re hot stuff and can prove it with your trades, you should start building up a following at Covestor now.

The UpDown – Similar to Covestor, The UpDown allows you to compare your investment performance to the community and get paid for it. At UpDown however, your portfolio is play money. Perform well, and you can earn real money. My portfolio was up 7.95% in February. I made $1.37 in real money for my play performance. It’s a bit like Fantasy Football for investors.

Too bad that million dollar portfolio wasn’t real! UpDown’s trade platform feels and acts very real, and it’s addictive. If you think you’re a great trader, strut your stuff on UpDown and play without the risk. You start with $1,000,000 cash.

Zecco – Zecco launched last year with the offer of “free trades” for all. That promise has since been scaled back to 10 free trades a month provided you have $2,500 to deposit. While I’ve heard rumbles of customer service issues, if you’re an options trader, a $4.50 base is pretty cheap. Once I can scratch together $2,500, I’ll be opening an account here to try out.

Their social angle is called “ZeccoShare.” Here, Zecco clients can share their investment portfolios as well as see top holdings across the community. Not as advanced as Covestor or Cake, but Zecco is the all-in-one deal: brokerage and community.

How will Web 2.0 change Wall Street?

Will Web 2.0 and social networking communities change Wall Street? Has it already? Share your thoughts with your fellow Lending Club blog readers!

Our financial lives may start at an early age, but it’s not until we’re living on our own that our money management skills get put to the test. A proper start can make a huge difference.

It’s no surprise that many people have a hard time with their finances right after college. Between college debt, the startup costs of an adult life, and a lack of experience handling money, there are a lot of factors against you. A first “real job” may also bring in much more money than you’re used to having. It’s easy to settle into the mentality that you have plenty of money, enough to not worry about keeping track of it. In reality, entry-level pay tends not to be all that great, and you might not realize that you’re making only just enough to get by. Along with the newfound riches come newfound expenses as well. So keep track of your finances to stay on top of them.

In your twenties, planning for the future may seem like a low priority. I’m not just talking about goals that are way down the line, like retirement. Even goals that may be coming sooner than you think, such as purchasing a first home, seem far off. At this point in your life, you have an asset that others can never hope to re-attain: time. Having time allows you to put away less money now for the same benefit as putting away more later. Even if you realize that starting to invest early is the right way to go, finding the money to start may be difficult.

You may be tempted to pay off any outstanding student loans as quickly as possible. That’s an admirable goal, but not necessarily the best use of your money. Student loans tend to carry extremely low interest rates, which would be hard to find through other means. So instead of paying down your student loan debt quickly, at the cost of letting credit card debt accrue, using any extra money that you can scrape together to pay down credit card debt is probably a better way to go.

Person-to-person loans from Lending Club carry interest rates that are between those of most student loan debt on the one hand and credit card debt on the other. You can use such loans to pay down higher interest rate credit card debt and help to fund your long-term goals. Lowering your overall monthly payment towards debt will open up a whole new world of savings possibilities. Paying off your highest interest rate debt first (after making at least the minimum payments on your other debts) will yield the most savings. When you finally have only student loan debt remaining, which likely has the lowest interest rate of all of your debts, you can then begin to pay that off at an accelerated rate.

A recent stream of automotive warranty extension mailings has led me to look further into the industry. What I’ve found has been eye-opening.

At first, receiving a reminder card about renewing my car’s warranty seemed strange. My car is still rather new and the warranty doesn’t expire for quite some time. It wasn’t until I read the fine print that I understood why I was getting the notice. My confusion came from the fact that the notice appeared to come from my car’s manufacturer, when in fact it was sent by a third party. It was filled with warnings and a sense of urgency, all of which were designed to make me act quickly.

As I received more and more of these offers, I was amazed at how deceptive they were. To the untrained eye, they really did seem to be important notifications from my manufacturer. Looking into it further, I found this article about the practice. In it, Herb Weisbaum notes that these products are not only deceptive, but also expensive and limited in coverage.

If you are worried about expensive car repairs after your original warranty expires, you can build up an emergency fund for this purpose. Lending Club can help in a number of ways. Obviously you could take out a P2P loan to cover any unexpected expense, but you can also use a loan to consolidate your debt to make it easier to build up an emergency fund.

If you do want to extend your warranty, the referenced article says that dealers tend to offer much better deals, which are negotiable, than the third parties that you’ve been hearing from. Even then, the article cites a consumer advocate who recommends that car owners skip extended warranties altogether because they are rarely worth the money. So there’s another reason for going the emergency fund route. Whichever way you decide to go, don’t fall for the pressure and deception of unsolicited third party mailings you may receive.

Jim, I'm 24. You're in your 20's. What is wrong with our generation’s financial health? From my own mistakes, to what I hear my peers discussing, where did we get so off track? Is our generation doomed to be in debt forever?

I'm 27, going on 28, and I don't think it's our generation. I think it's the generation before us that has set us on this course. Consider the national debt; it isn't a collection of twenty-somethings, it's a collection of mostly forty, fifty, and sixty-somethings setting our national budgets. Then take a look at the mortgage crisis; sure there are plenty of twenty-somethings involved but it's mostly people older than us. A twenty year-old isn't going to be able to refinance himself into a bad decision. I think that the whole credit card debt issue, while bad, certainly doesn't doom our generation quite as much as the fiscal irresponsibility of our government, led by our parent's generation.

What inspired you to start Blueprint for Financial Prosperity, your finance blog?

I actually was trying to start a deals site, which is still alive but barely ticking, and then decided to start writing about money issues and personal finance to supplement it. As things went along I realized that writing about personal finance was more entertaining than searching for deals so I kept at it. Three years later, here we are.

What financial area are you most passionate about?

I'm afraid there isn't any particular area I'm more interested in. I suppose whatever is most appropriate for where I am in my life is what I'm most passionate about.

What topic really makes your blood boil?

I don't like it when people don't take accountability for their actions and I don't like it when people lament their own situations. If you're in $20k of credit card debt, deal with it. Yes it sucks, yes it's a lot of debt, but you weren't complaining when you were spending the $20k to begin with and you need to stop complaining and fix the problem.

If you could pick one superhero to be...who would you be, and why?

Superman, if only for the ability to fly. I hate sitting in traffic, it'd be bada$$ to just fly around anywhere. Plus I could turn back time just by flying around the world (I suppose I'd also need his ability to not have to breathe in space).

You recently got married. Congrats! How have you and your wife handled your separate finances? What advice would you give engaged couples?

Thanks! We combined our finances even before we got married. I think engaged couples should talk and do what's right for them; you can read magazines and blogs and everything for ideas but it comes down to how you two distinct individuals should handle it. There's no right answer for everyone and to shoehorn someone into combined or separate would be a mistake. I think that applies for everything in a relationship, be it marriage or otherwise.

Peer to Peer lending. Good idea, bad idea, or just plain crazy idea?

As a borrower, great, as a lender, jury's still out. I like it because it's a more efficient marketplace. If a lender is willing to lend to someone for 6%, why force the borrower to go to a bank at 8%? We may find out that the default numbers are too rosy or something else but for now it's a good idea overall, especially good for borrowers.

Who is going to win the NCCA tournament this year?

I went to a D3 school, Carnegie Mellon University, in Pittsburgh so I'm gonna say Pittsburgh, though I think UCLA or UNC's got a better shot at it.

Jim’s fantastic finance blog is Blueprint for Financial Prosperity