Why My Family Doesn’t Use Cash Envelopes for Most Spending
While most people who are getting out of debt and adjusting to a budget opt to use cash envelopes my family did not. In fact, I do not like cash envelopes for everyday spending. I think they are great if you have impulse shopping issues and understand the psychology of it.
If you used the cash envelope system to help your family get on track financially props to you! That is awesome. I am not here to knock that. Getting out of debt and in a better financial situation is a win no matter the method (as long as it’s legal of course).
Cash is kind of nasty…
But I’ve worked at a bank. I know what nastiness is on money. According to this TIME article pathogens have been found on 94% of paper money, and the flu virus can live on paper money for up to 17 days. Ew.
Aside from the ick factor there is also the security factor; if someone spends an average of $25 a week on gas, $100 on groceries, $25 on miscellaneous/personal spending money, allows themself that $5 latte one a week, and average $25 on miscellaneous items for the kids, etc… they could easily be carrying almost $200 (or more, depending on their budget) on them at all times.
If you take out cash for the entire month at the beginning of the month (which I see on social media a lot of people do) you probably have several hundred dollars on your person just walking around town. This makes me nervous. If my purse were to be stolen or I left it somewhere today I could easily call and freeze or cancel my debit cards instantly. If I lost cash…
Then there’s always the confusion caused when I find cash in my wallet. Did someone give one of the kids money and I forgot to deposit it? What was this for? Who is this from? What am I forgetting?
I do make a few exceptions
We have at times kept a cash envelope at home for special little sinking funds. This is a great way to set money aside for things like spending money on clothing, birthdays, small personal loans… money that doesn’t need to be redeposited for online spending or bill payment.
Accountability Alternatives if You Don’t Like Cash Envelopes
Just because you choose not to use cash does not mean you get a pass on tracking your expenses. I still keep receipts even if I do not need to use them to split it into different budget categories in the Every Dollar transaction. I scan those receipts into my cashback apps to optimize my savings. Only after I have transactions logged in Every Dollar, scanned onto Fetch Rewards, and any receipts with qualifying items on Ibotta redeemed do I put the receipts in the recycling.
Most banks even have a budget component to their online banking; you can build a budget and categorize expenses as they happen right on the bank website. How’s that for handy? As a bonus, since we just use our debit cards most of the time I don’t have to worry about making sure my husband has cash if he stops at the store for me on the way home. I just record the transaction and move on.
To Use the Cash Envelope System or Not?
In the end, we all need to do what works best for our family to help us meet our financial goals. If cash envelopes work best for you then that is great. Personal finance is personal after all. Just because I don’t like cash envelopes doesn’t mean you won’t love them.
The main reason I felt compelled to write this article was just to let people out there know it’s okay if doing what popular radio hosts and financial experts say doesn’t work for you. It’s perfectly acceptable to combine the advice of several experts and your own personal preferences into a system that works for you.
Any steps you take toward getting on a budget, paying off debt, and saving for your future are to be applauded. You don’t have to like cash envelopes to make that happen. Find what works for you and work that plan to reach your goals. And if you do use cash, just carry what you may need that day with you.