Cash envelope review

Hey budgeting people,

In the month of July, I had decided to try out the cash envelop system. If you haven’t heard about it, it may be something you want to try.

This system is what it sounds like. Envelops with the budgeted cash in them.

Simple and easy.

Personally, I found the cash envelops to be helpful. But I was incredibly hesitant to use them. It only took me five years to try.

Excuses I used to not use cash were:

  • What happens if your wallet is stolen? The money is gone. True, one downside
  • What if you don’t have your envelopes and you need to spend money
  • What happens if you do one transaction but it’s for multiple categories?
  • Cards are easier to track

Ironically, all these excuses I used to not use them, ended up being mostly a non-issue. Or they were useful in preventing me from spending money unnecessary.

Aside from that one incident when I used my Emergency fund for a non-emergency because I didn’t bring my cash. I did pretty well, keeping to my budget.

It turns out, I suck at using my card only. This was evident in the fact that before July, my budgets were all red, and by using cash it went to greens, yellows and oranges on my report card.

The best excuse I had, was what if one shopping trip fell into multiple categories?

However, I have come up with three different solutions to that.

One being just go through check out twice. This this specific incident would only ever happen to me at a grocery or target-like store. So, you can use the self-check out and do two transactions or ask to split the transaction at the till. Usually the cashier won’t mind.

Or you could use the smaller bills from the relevant categories.

A third solution could be combining categories. I.e. groceries and cleaning supplies under the household category or extending definitions like all toiletries, makeup and other personal items going together under toiletries.

The second most common excuse I used, was that I may need something, but I didn’t have the envelop. This may happen from time to time, but you need to be critical when it does. Think to yourself, “do I really need this?” or “can I come back and get it?”

I understand that people forget things, or plans change; but it will make you evaluate what is important. If it is important enough, you will go back for it, and if not – you will just not spend the money.

As for cards being easier to track, I actually preferred having the receipt as I knew exactly what I bought, and when.

Using cash envelopes makes you more critical when you are spending. Even if ends up not being for you, you should give it a go, at least once.

Overall, I loved the cash envelopes and I will be using them again for the next couple of months, to see if I still love them. As I genuinely had no other money, overspending became so much more difficult.

What about you, have you tried cash envelops?

Did you like them? Or do you prefer cards?

Let me know your preference and why? We are all for a good discussion here!

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