I recently started using the cash envelope system and it’s been amazing so far! It makes the budgeting process so simple and easy.
I don’t have to feel nervous or guilty about spending money on fun stuff because it’s already been budgeted for and I know EXACTLY how much cash I have left in each envelope.
Want to start the cash envelope system? Check out this post that walks you through the system!
Many people are hesitant to start budgeting with cash for a number of reasons. Here are some of the most common ones I’ve heard.
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It’s too restricting.
This argument is often used to justify not creating a budget, but it’s completely false! A budget is as restricting (or not) as you make it. YOU get to choose the numbers for each category.
It’s actually quite freeing because it gives you permission to spend. I love having a certain amount of money set aside for fun spending, date nights, outings with friends, and fast food. I now feel zero guilt when I spend money on these things.
If you find yourself running out of cash in a certain category every single month, you might need to adjust your number for that category. And that’s totally okay!
Cash is inconvenient.
This argument is actually pretty accurate, but I think it’s GOOD that cash is inconvenient. Swiping a credit card is way too easy.
We don’t “feel” the money being taken away until we pay the bill a month later. This makes it far too easy to spend money without really paying attention.
Many people end up broke for exactly this reason…because they have no idea where their money is going.
A budget allows you to tell your money where to go instead of wondering where it went.
Cash makes it easy to track exactly how much you have left at any given time without even needing to check your bank account balance (or credit card statement).
I don’t have time.
I get it. It’s a pain in the butt to go to the bank every month.
We’ve become so accustomed to convenience.
Our paychecks are direct deposited into our checking accounts, our bills are automatically debited from our accounts, and we can buy almost anything we want online.
Going to the bank every month is a pain. Do it anyway.
I actually go to the bank twice per month to get cash for my envelopes. My husband and I don’t live on last month’s income like many personal finance bloggers do.
We live on the current month’s income, which means we don’t have enough money at the beginning of the month to cover our envelopes for the entire month.
So, I go to the bank every two weeks and get enough cash to last for half of the month at a time.
It’s not convenient, but it makes budgeting so much easier and it’s totally worth it!
It’s not what I’m used to doing.
Change is hard. Our brains are wired to be efficient (it’s a survival mechanism – we’ve evolved this way). Your brain wants to do what it’s always done because its main purpose is to keep you alive.
You’ve stayed alive this long, so your brain knows that if you keep doing what you’ve always done, you’ll continue to survive.
This was useful when we dealt with life or death situations on a daily basis (like being attacked by a bear), but it’s much less necessary at this point in our evolution.
This is why change is so hard for so many of us.
Worry, doubt, and other negative emotions are completely normal when we try new things…even little things that don’t seem like that big of a deal. That’s just the primitive part of our brains trying to keep us alive.
Do new things anyway.
Should I use cash envelopes?
I don’t agree with the reasons listed above, but in my opinion, there are actually some good reasons NOT to use the cash envelope system. I don’t believe that EVERYONE should use cash envelopes.
If you’re crushing your financial goals and you’re staying on budget every month, you may not need to use cash envelopes.
If that’s you, it’s totally fine to stick with using a debit card (or credit card if you’re one the most people who loves the reward points)!
When my husband and I lived with my parents, I didn’t use cash envelopes because it didn’t make sense for us.
I was on a four year spending ban and every extra penny went toward paying off our massive student loan debt, so there wouldn’t have been any cash to put in the envelopes.
Do what makes the most sense for YOU and your unique situation.