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Cash envelopes are a popular method of budgeting in the personal finance world. It makes sense, you give yourself a certain amount of cash for a time period and once it’s gone, it’s gone.
This allows you to have complete control over your money and actually have to hand it over to pay for things. The physical exchange of money is felt and it allows you to change your mindless spending when it comes to a card.
I get it. This is a great way to budget and I think it allows a lot of people who use it to make significant change in their spending habits. I recommend this method to a lot of people because it is proven to work and has worked for so many people.
It just doesn’t work for me. And here’s why.
Cash envelopes don’t work for me because I’m a natural saver.
I’ve never been one to blow a ton of money. I’m naturally the type to save my money and then buy what I want. I’ve always been this way since I was a kid. I loved seeing my Pony Club account grow (the kids bank account they offered at my local bank).
I’ve never been in credit card debt, yes, I use them for the rewards, but I always have the cash available. Since I’ve never really had a spending problem, it was much easier for me to start budgeting. I didn’t need to have that hard money mindset change around spending.
But, I did need to have it around saving. It was hard for me not to save a lot of money. To be honest, I’m still saving money while paying off my debt, not much, but enough that it makes me feel better about sending thousands to my student loans.
Cash envelopes don’t work for me because I’m a nerd.
I love tracking my spending and budgeting my money to work for me. I didn’t start budgeting until the summer of 2014, but I always kept tabs on my spending and knew how much was in my accounts.
Cash is hard for me to track, I don’t do well with it. I like to streamline my systems to be easy for me to maintain, cash takes time and is hard to track for me. I like to be able to look quickly at my accounts and see where I am at any given point in time, that can be tricky with cash on hand.
Being a nerd, I like to account for every penny and give it a job, with cash, that gets a bit messy at times. For me, there are just too many moving parts with cash.
However, I do love paying cash when a discount is offered and I’m all about that.
What I do instead of cash envelopes.
Ultimately, you need to find whatever method works best for you. It’s going to take time, but once you find a system that works, you’re going to see great progress in reaching your financial goals.
For me, I use Mint to track my expenses loosely throughout the week. This allows me to quickly check in with myself to make sure I’m on track.
On the weekends, I put all of my spending into my spreadsheet for tracking expenses and update my budget for the month. This allows me to see where I’m at with my spending heading into the new week.
Because I have so many side hustles, I zero out my budget at the end of the month. All of my side hustle money, and most of my teaching salary, goes directly to debt. By the end of the month, all of my money has gone somewhere, mostly debt, for now.
Find a system that works for you.
You need to spend the time finding what naturally works for you. If cash envelopes don’t work for you, don’t try to force it to work. Spend some time trying out different methods and find the one that feels the most natural to you.
And it’s not going to happen over night. I’ve been doing this since 2014 and I’m still reworking it to figure out better ways. It can absolutely be difficult to get started, but that’s why I’ve created email coaching to help you get started. If you’re someone that is struggling to get going on a budget, then that is absolutely for you.
Once you have a system in place that works for you, it will be much easier to budget your money. It’s worth it to spend the time finding a system that feels most comfortable for you. By finding a system that works for you, it will allow you to more easily manage your money. What system do you use to manage your money?