Funnily enough, I'm the exact opposite. Mentally, money in my account is "my money". Cash I've withdrawn feels like already-spent money. Since it's unaccountable, I tend to spend it more frivolously. Might be a generation-to-generation thing.
Which is fine!
Here's what you do: allot a certain amount of cash to discretionary expenses each month. You take that money out at the beginning of each month (actually in my case, twice a month) and then use it. And when you run out you're out.
What you've just done is used physical cash to put a hard ceiling on your discretionary spending. This turns what are normally variable expenses into a fixed item in your budget, which makes it a heck of a lot easier to account for.
Once it's in my wallet, it's already spent by my spouse.
I might actually spend as much as 10% of my cash withdrawals myself. I can reliably keep a single $10 bill in there, as the "didn't want to clean you out"-based guilt prevents the very last note in there from being taken.
Of course, now the spouse just takes the debit card from my wallet instead, so I might have to start keeping more cash in there, in case I go to pay for something one day and it's not there.
It definitely formed a different attitude towards cash then I feel I otherwise would have got. The money I have left in my wallet feels like all I have this month, and as the bills disappear I really feel the spending. I feel spending from my bank account much less.
I think the mentality comes from using your bank's website/mint/etc to track your spending. Anything done with a card becomes a specific line item staring you in the face; cash, however, just falls into "miscellaneous".