Question

What is the purpose of having cash envelopes? Why can't the money just stay in your checking account? I'm still confused about this

Answer 1

Lol. I felt the same way. I just couldn’t wrap my head around the idea of taking cash out of my accounts. I’m an excel spreadsheet kind of gal. However, because my husband is not on the budget journey with me and he is a spontaneous shopper (especially at Costco), I let him think he came up with the idea of budgeting $200 per week for groceries. I will put cash in the envelope and stick it on the fridge. Little does he know he is budgeting and bringing down grocery costs from $1500 to approximately $800!  

Comments

@toxoplasmosis Costco is the worse for staying on budget lol you go in for a few things and it’s 2 carts later

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@hampton9 my hubby’s last trip cost us $700! Never again!  

Answer 2

Cash gives you a hard stop.  

Answer 3

Categorical organization. I think of a checking account like a huge pot that you just pull and pull from. However you could be pulling money that’s not there for that intended purpose. The envelopes create clear parameters to guide spending. It helps us a lot. It especially helps my husband. If he sees money in our checking account he thinks it’s there for the taking. Conversation after conversation and he still does it

Answer 4

I did my grocery shopping this week with cash budget for the first time. I saved $40 over what I usually spend, just because I THOUGHT about what I was buying, if I really needed it, and by intentionally buying what's on sale.  

Answer 5

You can leave the money in the bank but it takes more diligence to stay on track. You have to know exactly how much money goes to what category but it is possible :)

Answer 6

I feel the same way. When I have cash in hand I want to spend it. So I place funds in an account that I can’t see online. The only time o know the balance is when I ask the bank. I can’t withdraw it at all. It will dump every August and another in October. This will help with heating and Christmas

Answer 7

It’s all about preference! I do both. I track my bank transactions through the Mint app where I have set budgets on multiple categories and then have cash envelopes for sinking funds for bills/personal savings on specific things (right now it’s a new mattress and after that it will be a new vacuum! ) so I don’t rely on the money just being there. Experience has taught me, it won’t just be there!  

Answer 8

Oh and I’ve read the concept behind it being that spending cash is more hurtful than tapping or swiping your debit card.  

Answer 9

I think it depends on your relationship with credit and debit. Cash works for a lot of people because it gives them a hard stop and something physical to hold and let go of when purchasing. I personally get too overwhelmed by cash and when I have it I use it. When I budget I can get it under control without using cash and I get really anxious about the idea of losing my rewards/perks from using credit. What works for some doesn't work for others. If you struggle keeping things in line without going the cash route, go the cash route.  

Comments

@warder42 I’m the same way with cash. Whatever works for you is the right thing to do

Answer 10

I find that having the cash in the separate envelopes keeps me on track. If I don’t see the money I spend more. I find that I am more frugal then when I was using my card and I make sure I stay in my budget because what is in the envelope is what I have for the week.  

Answer 11

If you’re not disciplined enough with your debit card and swipe all the time the envelopes help to deter that behavior. to an extent, overall it’s a great basis by which to become more disciplined with your money. and to actually “see” where it all goes.  

Answer 12

Having cash doesn’t = hard stop for everyone. My husband would see envelopes full of cash, ignore their label and take from them for whatever he wanted. So cash envelopes didn’t last long for us at all!  

Answer 13

Psychological. hurts to let go of "cash"

Answer 14

Cash makes you really see what you're spending and where you're spending it .  

Answer 15

I am much more intentional with my spending when using cash. I have that "ouch" moment when I hand it over. I don't have that same level of control when I use my debit card.  

Answer 16

For me I tend to overspend if I use my card for stuff. Like grocery shopping, I'm more mindful with what I'm buying cuz I know how much cash I have and how long it needs to last. There are many who keep I. Their account and just use envelopes to write amount like a digital wallet. They aren't necessary but for some it works well

Answer 17

I spend more when I can't physically see what I have left. Since I started using envelopes I have been more intentional with my spending and only used my credit card for gas and groceries but then pay it off monthly.  

Answer 18

I have saved so much money by using cash. I no longer by needless little things because I don't want to waste my cash on them and because I have only so much, with my debit card I would just spend Willy nilly.  

Answer 19

I have found I save so much more with cash, we’re slowly switching over to cash spending and just leaving bill money in the checking account

Answer 20

It changes everything. It’s easy to not even look at the amount with a card purchase.  

Answer 21

In my view, it helps not to swipe the debt card so much and in turns to stop swiping the cc. That’s how I look at it. And it feels good to pay with cash and staying within your budget.  

Answer 22

For me, having the cash envelopes keeps me from swiping my card mindlessly. This is what causes me to be in the negatives. Plus, using cash has saved me money - especially with something like gas. I am more aware of how much I am spending and easier to stick to a budget.  

Answer 23

This all comes down to making changes that we are not use to. Sometimes making changes makes us think before we act. Having cash on hand makes me think hard whether I want something or NEED something

Answer 24

I like cash envelopes saving for up coming expenses, so I SEE what I have, what I still need to save for that particular item/expense. If it were all thrown in my savings or checking all together I would just see a large amount of money to spend. This helps me set aside for things that are coming up and not just for the present. Now that being said I have a few "virtual envelopes " that I keep track of on paper because for those expenses cash isn't convenient

Answer 25

I spend less ‍♀️ works for me. My husband can do it all in his head and only use his debit card

Answer 26

Because i don’t hold myself accountable., once i see there’s money there I want to spend it.  

Answer 27

There's actually a different brain reaction when you spend / handle cash versus swiping a card, so there's that. It also helps me stay stricter with my budget. Like, if I have $X for food, once it's gone it's gone and I stay on track, but if I'm swiping a card whats a few more dollars here and there because it's easily available. I guess it just means my money has a place and it helps me stay on track, it's more work, but I think that's part of why it works. it's more intentional.  

Answer 28

You can keep it in your checking account. You could use the cards instead for each category. Mike has a video on it for debut card users I believe. I don’t use the envelopes.  

Answer 29

I use my cc for everything and pay it in full every couple weeks. I keep notecards in my wallet with rolling balances so I know how much I have left in my category. This is my first month trying this tho. So tweaks may happen. I’m just not a cash person

Answer 30

For me, if I leave it in my checking account my mind tells me it’s extra, a free for all Yeah, my self control is not very good

Answer 31

I think it varies on where your at in your journey, what works best for you, etc. You can keep your cash in your checking account, however, for some, it's the visual of using envelopes and "once it's gone it's gone" that becomes the game changer in saving or paying off debt. When we did cash we hands down spent less than when the money was in the account or used CC's. Some of our sinking funds have always been kept in the checking account (the ones that are used on say a monthly or yearly basis) and I have all the balances recorded on a spreadsheet.  

Answer 32

I think it depends on if you're just starting a new budget/frugal lifestyle vs already in that mindset. Also, people have different goals. If I had massive debt, I'd probably be a lot more concerned about reigning in my extraneous spending.  

Answer 33

I pay my bills online and use cash for eating out, miscellaneous spending, groceries and entertainment. these are the areas I tend to overspend in. I carry less than 100 dollars at any given time.  

Answer 34

It's s visual. You literally can see how much you have to spend. I can not believe how much useless spending I was doing with my card.  

Answer 35

It depends on the person. I have no problem being cashless, I always know what I'm spending and what is in my account. However, my husband has to have cash or he just spends without thinking if he has a card and would frequently overdraft our bank account. If he has cash envelopes he can visually see how much we have to spend in the budget and is more conscious of his spending and actually ends up spending less than the budget.  

Answer 36

I don’t use cash envelopes, I just use my debit card but I KNOW how much I have left after my bills/sinking funds are done

Answer 37

I’m not good with a debit card, hence the cash envelopes, but some people are better with debit cards.  

Answer 38

I don't use cash envelopes either. We just budget. I use YOu Need a Budget which is a similar system - you allocate all your money, but you don't need to use cash, for it. It imports your transactions from the bank.  

Answer 39

I started using cash to help my spending. I was really easy for me to swipe. Along with following TBM I have a financial coach that I work with weekly. She suggested I start using cash. It has really helped me.  

Answer 40

I put it into the cash envelopes and then deposit into a separate account savings and don’t toUch it

Answer 41

I don’t use cash envelopes. I’m a cashless spender so I leave it all in my account and track category spending on trackers in my wallet. I love it and it works great for me!  

Answer 42

There’s proof that paying with cash triggers the trauma centre of the brain which does NOT happen if you pay with a card. So if you want to decrease your spending overall, using cash is much more effective than using willpower. We’ve cut our spending in half just by using cash and doing nothing else different.  

Answer 43

I don’t use cash envelopes. It’s all in my checking and I use the register, all the time. Keeping track is necessary.