Saturday, January 12, 2013

Why We Don't Use a Cash Only Budget System

cash only budget

Even though we've been having lots of fun and things have been going very well, my mind has been on the money lately, and the money has been on my mind. The mister and I have decided we're going to sit down and create a project plan for the life transitions we would like to see happen. You know, really work through them rather than just sit around dreamily wishing X, Y, or Z will happen.

X would probably be paying of the mister's huge and looming student loans as quickly as possible. Y could be refinancing the house to lower our payments or keeping them at the same level with a shorter term. Z? That's my professional life and, boy howdy, is it all over the place.

There are probably other letters of the alphabet we could tackle, but those are the biggies. Like I said, money is on my mind. We are frugal people by nature, so working on finances takes a fair amount of craftiness on our parts. Those articles advising spendthrifts to stop frequenting the coffee shop? Do not apply in this cheapskate household.

One tip I've contemplated with interest, however, is the cash only budget. You know, where you keep envelopes with each month's food budget and household expenses and so on, only drawing from the envelopes rather than poking around in the bank account.

We have considered switching to a cash only budget a few times, particularly when we've been working on our debt snowball. But unlike most people - at least so far as I've been led to believe by personal finance radio shows which are like my crack - cash makes me spendy.

The presence of cash money makes me feel rich. After all, my brain says, there wouldn't be real legit cash dollas in your wallet if you weren't a real baller. TREAT YO'SELF. Whereas if the money is locked up tight in one of our various accounts, I know that spending money will make those balances dip. Uncool. I like to see big numbers when I log in to said accounts. What's big mean? YMMV.

So I don't carry cash.  I try to avoid visiting ATMs because that puts dollars in my pocket and I know that having dollars in my pocket makes me stupid. I don't keep envelopes of cash around the house. Sorry, burglars!

What I do is keep my money in the bank where I can keep an eye on it and make an effort to make sure it stays there.

What budget strategies have worked for you? Which haven't done you any favors? Because the chick and the little dude in the pic above really want to know!


  1. There is nothing "little" about that dude. He's like, full-on ready to get his driver's license. He is large.

    1. Little man's not even 12 lbs but that's like two P.'s at the same age.

  2. I don't do the cash thing either, doesn't work for me! I too, feel quite rich... On the other hand, with my credit card, I don't really KNOW what I've spent, so I stop spending because I'm worried it will be too much. Also, cash is a pain.

  3. has been great for us; we log in every few days and track all kinds of metrics on where our money goes. Cash seems like a nice way to keep you from overspending, and but that's where the benefits end. At the end of the month—unless you really want to wrangle dozens of receipts, tinker with envelopes and write *everything* down—you have little idea where your money goes. Not to mention you aren't building any credit by using cash.

    I recommend seeing a financial advisor as well. (For example, I am 35 weeks pregnant with twins and we decided to ramp up our kids' college savings and start a 529 Plan; investments like that are a lot easier with the help of a professional.) We feel great knowing that every month, our spending comes AFTER our savings goals, not just when we have "extra" money.


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