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Changing the Way I Budget with Cash

June 25, 2015

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Have you ever tried a cash only budget? My budgeting strategies and how a cash budget works! @shoeaholicnomore

As the end of the month approaches, I’ve found myself absolutely dreading putting together my month-end budget report.

It’s not that I don’t want to see the numbers of how much I spent in each category. I already know I’m going to be over in a few categories – entertainment (like always), clothes and hair (like always), groceries (by about $5), and household (by about $20). Instead I’m dreading putting it together because of the amount of time it takes to crunch all the numbers from my cash spending envelope and the amounts I spent on my debit card when my cash ran out. That’s time I could be using to put together higher quality content for this site or for one of my many freelance jobs. It’s time I could be spending with friends or family, or even just catching up on sleep Netflix.

I also know that’s not the way it should be. I should STOP SPENDING when my cash runs out, but lately I’ve been turning to my debit card more and more. This makes my spending get out of control that much faster, and it makes it that much harder to put together my budget report because there are a lot more transactions running through my account that I have to sort through each month. Therefore, I’m going to be making a couple of changes to the way I budget and spend money.

Cash Only Spending

I’ve tried using cash only in the past with some success. I’d do great for a while and then I’d eventually put my debit card back in my wallet to make a specific purchase and afterward I’d come up with some excuse as to why I should just keep it in there all the time. Usually it was some variation of “just in case” or “just for an emergency”. In reality, I could just run home and get my debit card if I really needed it to make a purchase. My town is small enough that it only takes about 5 minutes to get to my house from any point in town. My carrying my debit card was just a lazy habit.

The other problem I’ve had with cash spending lately is that I’ve been stealing from one envelope to fund another when I run short. I’m not quite sure how I feel about this. On one hand it makes it difficult to know exactly how much I spent on each category, I only know that the cash is gone. On the other hand, is that such a bad thing? As long as I don’t overspend my cash anymore or steal from the cash savings I have for house maintenance/repairs and car maintenance/repairs who really cares where the cash is being used? What’s your opinion on this? I need a little guidance.

Budget Template

Another thing I’m going to change is my budget template. I’m going to try to narrow down the categories in my budget template because there are just too darn many to track right now. I shouldn’t be stressing out about the time it’ll take to put together my month-end spending report, but lately I have been and that’s just silly! There are plenty of other, more important things, to stress out about besides tracking my spending. I still think tracking your spending is a helpful tool if you are trying to get out of debt or save up for a major goal, but I don’t think it should be such a long progress.

Hopefully the combination of switching back to cash only and narrowing the list of categories will help me spend less money and therefore have less to track and report each month.

Can you think of anything else to help me with this? Do you get stressed out about budgeting? Am I crazy? Haha, don’t answer that last one. 🙂

Have you ever tried a cash only budget? My budgeting strategies and how a cash budget works! @shoeaholicnomore

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20 responses to “Changing the Way I Budget with Cash

  1. I believe the intent of a cash budget system (like the one you’re using) is to tweak it as needed. In other words, you’re supposed to use cash from one category when another runs over. You can make a note to yourself on a notepad or on the envelope you borrowed from, if you use envelopes. The entire intent of a cash budget is to allow flexibility without turning to a card. One idea I use to avoid card use is to leave some in a “just in case” category. You cannot predict every possible expense; don’t kill yourself trying. If you don’t use the “just in case” money, save it for something fun or carry it over to hold next paycheck.

  2. I don’t think you are crazy. 🙂 I can totally understand where you are coming from with the troubles of finding something that works for you… I still haven’t figured out how to curb our spending, but I’ve found YNAB to be a great tool for tracking expenses, and it helps you move budgeted money between categories. (Added bonus are the pretty graphs and stuff it gives you!) That being said, I think that the cash system works, but perhaps it might help to have envelopes and make notes on them when you take money out or put money in. Right?
    I’ve heard of one person who taped their credit card to the wall higher than she could reach, so if she ever wanted to use it, she had to purposefully get a chair and get it down off the wall… Another person froze theirs in a block of ice in the freezer… haha!

  3. I think it’s okay to borrow from one envelope for another category–as long as the other category doesn’t end up short as a result! Like Rachel said, the point of the envelopes is to keep you from using a card, so as long as you’re not resorting to the card, I think it’s okay.

    1. Glad to hear your opinion. Sometimes I’ve felt unsure about how rigid I needed to be about borrowing from one envelope to fund another.

  4. That’s the major reason I haven’t used cash envelopes long term…it’s too easy to steal from another one and, at least for my purposes, kind of defeated the purpose. I’ve been getting frustrated with how long budgeting has been taking lately, too. Ironic for PF bloggers, right? Summer does that as we essentially live off of money I’ve been setting aside for it, which is never quite enough, which is supplemented by side hustle income. So a couple of months ago I got rid of all the little things we need to spend money on and just created a generalized “spending” category. It’s not a huge amount of money, so I don’t think it matters, and I still go back and look at what I spent it on. So far no terrifying patterns have turned up, so I’m not that worried about it.

    That’s the thing about budgeting, there’s so many ways to do it…we all just have to find what works best for us.

    1. Thanks Femme! Yes, it is ironic, haha. But I am seriously dreading how long it takes. I think by not spending as much = less transactions going thru my account = taking less time to do my budget.

  5. I shy away from the fine art of budget analysis. I find it depressing and my expenses increase faster than my income. I spend less than I earn – that’s my simple motto.
    Left brain activities are challenging and I prefer not to get overwhelmed with the idea that life is all about money…its not!

    PS Wouldn’t mind though a copy of your budget template in case analysis ever tempts me…..

    1. Hey! Maybe I’ll put together a comprehensive post with a downloadable copy of my budget template for readers. Good idea Luci!

  6. I’m going to second the suggestion of YNAB. I’ve been using it since January and it totally is life changing. I swear that’s not hyperbole. I’ve paid off all of my debt except for my car since then (over $9K, I believe) and my net worth is increases every month. Before I used YNAB, I used Mint which made me somewhat aware of what I was doing spending wise but really was far more of a tracking program than a budgeting one.

    YNAB takes some work, but really is pretty user friendly and is ultimately worth it. It makes you very aware of where your money is going and I bet your month end reports would be far easier to compile. And the whole idea is that you are expected to move money around throughout the month and not feel bad about it. (They call it WAMing and “Rolling with the Punches”.) The community support through the forum is really awesome too.

    I think Ashley at “Blogging Out of Debt” uses it and did a write up not that long ago.

    1. Yes – I read Ashley’s write up about it on Blogging Away Debt. I have thought about YNAB a couple of times, but never put aside the time to sign up and try it out.

  7. As you’ve heard me say many, many times and are probably tired of hearing it, budgets represent freedom and help you make better choices on how to spend your discretionary income. I don’t have any issue with the cash envelope system but I do think for some people they make it too rigid. The point of a budget, at least in my book, is to make sure bills and goals get paid first and you can choose how to use the remaining as long you stay within your means. Meaning, it’s okay to *mindfully* take money out of one envelope to use for a different purpose, provided you consciously made the choice that you will now spend less in that category because you mindfully chose to spend more in another area. It is not okay if it means that you will run out of money by the end of the month and need to rely on your credit card or dip into your emergency fund to buy food, gas, etc. Budgets need to be flexible enough to let your respond to life in real-time because NO ONE’s life goes as planned, in both good and bad ways. You’re on the right track, Kayla. GIve yourself some space to also figure out what amounts should really go into which envelope because you may realize that you’re putting too much in one and not enough in another. Keep assessing and you’ll figure it out!

    1. Thanks Shannon! I appreciate your input. I’m a very plan-oriented person and when things get off track for me I have trouble getting back on the right path again. I’ve always struggled with this.

  8. I know people that have robbed one envelope to pay the other, and I think it still accomplishes the goal of the cash only method. But I’m like you and I would want to know what I spent in each category for the money – or else how do we learn? Either way, I applaud you for going cash only. A lot of people don’t have that kind of discipline. 🙂

    1. Thanks Jessica! I’ve tried cash only before, but I do seem to waver from it from time to time. Overall though, I think cash helps me keep my spending lower.

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