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July 14, 2017 · Leave a Comment

Our 30 Day Experiment with Cash Envelopes

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Budget· Budget Tips

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Some of you may be shocked right now.  I mean, it’s no secret that I’m not much of a cash envelope fan.  While it is the one thing that most budgets have in common, we’ve been able to pay off nearly $75,000 in debt without using cash envelopes, and just using our debit card.

Why am I not much of a fan?  Well, for starters, I never knew what to take out for each category.  It seemed simpler to use our debit card so I only had one thing to keep track of, and just keep our groceries under a set amount each week.

Besides, we’ve never spent the same amount of money month to month, or even week to week, on groceries.  And we can just forget about household items.  What we spend fluxuates each month based on our needs, or how fast my kids are growing and eating me out of house and home.

I honestly felt that to limit myself to a specific amount of cash was also, well, inconvenient.

Cash Envelopes

Why We Didn’t Use Cash Envelopes Before

The biggest reason it took me so long to make the switch to cash envelopes was that I cannot go to our bank and take out cash.   There is no physical building of our credit union anywhere near us.  The closest bank location is 70 miles away, while the nearest ATM is an hour drive away.  Nope.

On the plus side, they do work with some ATMs that are in a certain network so I don’t get charged when I do withdrawal money.  There are some of these ATMs in my relative area.  I say relative because there are a total of four of them within a half hour drive.  As I drive to these specific ATMs, I pass a bazillion others in the process, all of which charge me a minimum of $3 each time I take out money.  Annoying and inconvenient.

{I do have to point out that this charge is reimbursed by the bank, but not until the first of the following month, potentially leaving me out a minimum of $12 if I were to withdrawal cash each pay period.  That’s about the cost of our weekend newspaper subscription.}

And then I do get to such ATMs that I am not charged for withdrawing my money from, I can only take out in multiples of $20s.  All those other bazillion ATMs I had to pass on the way?  In multiples of $10s or $5s.  What’s up with that?

I cannot go to the ATM and say “Can I have that in $50s, $20s and $1s, please?”

Now, if you’re like me, you’re probably thinking “what about taking it as cash back during a purchase?”   And you are absolutely right!  I mean, Target, Walmart, and my local grocery stores let you take cash out at the end of your purchase.  I’ve been able to do it before for things where cash is the only currency they accept, like the occasional haircut, for the farmer’s market, or money for our local ice cream store {mmmmm!}.

Well, did you know some stores have limits on how much cash you can take out per day?  I didn’t until I tried.  Yes, I separated out my Target cart into multiple transactions thinking I could get out more cash.  Failure.  So if I’m trying to take $160 out in cash for the grocery store, it’ll take me 4 days.  Again, inconvenient.

So what was stopping me from spending a month to experiment with cash?  Absolutely nothing.  Besides my own stubbornness of course!

Our Experiment With Cash

Our experiment started because what we were spending on groceries each week was getting out of control.  I had spent the entire month of May running between soccer, band performances and medical appointments.  Our grocery spending was the furthest thing from my mind.  When all was said and done, we spent over $850 on groceries in May, and I needed to get that amount back under control so I could get more of our money towards paying off debt.

What I learned right away is this: paying in cash has a really big advantage because it’s very visual.

This is the reason to use cash.  Some will tell you that it “hurts”.  Not for me.  What hurts is continuing to lug around our debt.  What doesn’t hurt is knowing I only have $50 left in grocery money until next payday, so I better make that stretch.

Think of cash envelopes like a visual inventory of your debit card.  Rather than being left with the last imprint of your account balance, you have a real-time update of what is left.  It helps prevent those times you forget to subtract your debit purchases from that account balance you looked up previously.  You can physically see how much you have left in specific categories, whether it’s for groceries or for Starbucks.

Now don’t get me wrong, I still loathe the thought of having to get everyone out of the car in the middle of February in snow, ice and negative temperatures just to pay cash for fuel.

So over the last 30 days, I have come up with certain categories where I will still continue to swipe my debit card.  This includes fuel, birthday & holiday expenses, and our purchases from Target {I really do enjoy the 5% off as it offsets sales tax}.

But for some other items, like groceries, household goods, toiletries, garden items, personal spending money, kids spending money, eating out, clothing and so on…. you know, those little things that can add up so fast without realizing it every time you swipe your card… I’ll be using cash from here on out.

And about that previously thought inconvenience?  Not anymore.  What is inconvenient and annoying is consistently overspending, and not being able to put as much on our debts as we would like to.

Have you made the switch to using cash envelopes for purchases?  Was the transition easier than you thought, or harder?  What categories do you use?  I’d love to hear in the comments below!

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makingcentsmatter

makingcentsmatter
Only you can determine what your financial goals a Only you can determine what your financial goals are. If that means you're adding money to your savings account, or contributing to your retirement, while you are paying off debt, then so be it!⁠
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Do what looks right for you and your personal finances.⁠
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The trick to meal planning is to make it predictab The trick to meal planning is to make it predictable. But predictable doesn't mean the same thing week to week. You could have a chicken meal, a soup meal, a pasta meal, a leftovers meal, a family favorite meal, and so on.⁠
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I can only hear about my extended warranty I never I can only hear about my extended warranty I never purchased so many times. 😣⁠
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March Debt Paid numbers are in!⁠ .⁠ House: $51 March Debt Paid numbers are in!⁠
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House: $511.13⁠
Citi: $0 – this has a residual $3 in interest charges since payoff, due in April⁠
D NelNet: $100⁠
K NelNet: $100⁠
K Chase: $600⁠
Explorer: $336.27⁠
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Total Paid in 2021: $8,258.84⁠
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Extra Payment: There isn’t one this month since we were $25 away from zeroing out the budget for our February 15th monthly paycheck. That $25, and monies left from our January 15th paycheck, covered our OOP costs for Hubs’ filling. We also have some savings goals coming up that need to be met, making our debt payments a little lower for the time begin.⁠
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The battle for who can charge what tonight is abou The battle for who can charge what tonight is about to begin. 😬⁠
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My kids run off with my charger, plug it into one outlet 5 feet from where they found it like that particular outlet is the only one in this house, and then proceed to fight over who can charge their device first at night.⁠
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Then they get grumpy when it's their turn and it's not the proper input cable. #itwasmychargerfirst #dontlikeitgofindyourown⁠
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A needs his wisdom teeth taken out. I've talked a A needs his wisdom teeth taken out. I've talked a bit in our February Budget Check-In about how much of this I think we'll owe, and you can check that out on my YouTube channel if you're interested, but I wanted to say here...⁠
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To the mother with little kids struggling to get your finances in order, it will get better. I wish I could have heard those words years ago.⁠
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Nearly 10 years ago we were facing a $1,400 out-of-pocket portion for A's Phase 1 orthodontic work (I looked it up after I uploaded the video... we had a $1,400 portion).⁠
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It was a lot of money for us at the time. Our kids were 6, 2, and 3 months old. I don't think we even had $500 in savings, and I just left a part-time teaching job because it wasn't paying the part-time daycare bill, so paying our portion in full was just a dream I didn't think was achievable.⁠
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I was even stressing about the monthly $100 payments. We were so strapped. It was our breaking moment to start cutting costs and budgeting more effectively. We've learned a lot in that time period.⁠
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What we've learned is that it does no good to stress about it all the time. Life happens. All you can do is try to plan ahead, and if it's something that's unplanned, readjust. It won't always be easy, especially at first, but it will be worth it.⁠
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Nearly 10 years later, we are still paying off our debts. Student loans suck. But I see this bill as a reminder of how far we have come. Seeing a bill like this doesn't stress me out like it used to, and I know we can easily create a plan that can get it done and out of the way.⁠
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Will it delay our debt-free date more? Yes. But it's not worth stressing over. Life happens, readjust, and continue on down the path. It's called a journey for a reason.⁠
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It's almost payday! Here's how our variable budget It's almost payday! Here's how our variable budgeting categories are working out for the pay month.⁠
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Food is looking good this far into our paycheck, probably because miscellaneous - which includes eating out - took a hit with unexpected purchases. Pet is low for this time of the month, and Household is spot on.⁠
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Fuel looks like it'll be lower than last month (yay for weeks of snow days & delayed school starts), and Therapy had one more appointment than initially planned.⁠
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Garden, Dental, Medical & Propane are not included in these estimates so far because those expenses are coming from sinking funds. Once we're done with the month and review the budget, I'll move over the total amount spent from those sinking funds.⁠
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How's your paycheck budget coming along?⁠
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Automating your finances makes saving money and bu Automating your finances makes saving money and budgeting more convenient, and therefore easier on you. Out of sight, out of mind, right?⁠
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What's one thing you can automate this week to make your finances easier?⁠
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Me? I'm going to set up our sinking fund transfers to automate every payday (the 15th of every month). Our bank set up a feature on their app where we can schedule savings transfers now, and I'm going to take advantage of it!⁠
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Oh my word... our miscellaneous category has gone Oh my word... our miscellaneous category has gone a smidgen overboard this month!⁠
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I foresee a goal for March's paycheck to at out less than twice. That's where this category went awry. $99.16 of it went to eating out. 😑 Some of it was avoidable, but not all of it. Having to drive to multiple appointments in one day during snow squalls and rearranging our whole day was one of those unavoidable instances.⁠
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Tracking our expenses - much like a budget review - is vital to sticking to your budget!⁠
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#makingcentsmatter #debt #debtfreejourney #debtfreeprogress #debtfreecommunity #realbudget #budgetcategories #monthlyincome #savingmoney #savings #frugalliving #frugalblogging #budgeting #zerobasedbudget #financialgoals #personalfinance #personalfinancetips #financialfreedom #expensetracking #budgetfail
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