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.
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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