Question

So, I am a complete newbie. I learned of TBM last month and spent weeks reading posts, reading her blog and taking notes. I am still confused I am having a hard time wanting to pull cash out of the bank and put into envelopes when my savings account earns almost 2% and my debit and credit cards all earn 1-5% cash back I do not have an issue with debt, I have less then $1200 which I plan to have paid by end of the month. My problem is mindless spending. I have OCD and ADD and tend to buy stuff we don’t need because “it’s on sale”. Which, since joining this group, I can proudly say that all of January I made a list of things we NEEDED and stuck to it! It was like pulling a kid out of a candy store to get me to leave sale items behind, but I did it!  Is anyone else in this situation? What is the best way around it? Do you keep money in separate accounts or just track a certain way? Please Help!  

Answer 1

Cash envelopes cures the mindless spending, it’s in the psychology of it. Something is physically leaving your hands and you see and feel that you now have less. I would try it for a month or two at least to help with the mindless spending and then maybe try an app like ‘EveryDollar’ to see if you spend differently.  

Comments

@hamrnand20 you can do either! I put all left overs into debt at the end of the month and start fresh.  

Answer 2

I keep money in separate accounts.  

Answer 3

I don’t do cash envelopes. I found it very inconvenient. I find the success is all in the tracking and knowing how much you have left in each area. I literally track every day or other day so I 100% know where I am at and if I’m going out to buy something I double check my tracker. I then use credit card and pay off with my bank account when I get home. If you can be disciplined there’s nothing wrong with it. If it’s tempting to spend too much etc then cash envelopes are best

Comments

@cohla I never did this before but it recently occurred to me that I should be going this. I was getting stuck in the pay this bill when it’s due. I’m hoping to doing this weekly to keep closer track of my spending!  

Answer 4

I keep a separate bills account, spending account and savings

Comments

@hamrnand20 I transferred all my bills recently to the one account. Makes SUCH a difference as I know my money is there and I don’t need to worry about overspending. I’m not keen on careying envelopes so my debit card has, budgeted spends, fuel and shopping. I just keep track what I spend or withdraw my cash before I go to spend it.  

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@hamrnand20 your welcome! It’s a big task calling the companies to change the accounts but once done, it’s a blessing. They will tell u when the next payment will come from that account. Just watch them for the first month as one or two may be delayed and come from original account. I also asked for most of them to come out on the 1st of month too.  

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@hamrnand20 totally! It’s made my budgeting much less stress! I just calculate the months bills, put that in the one account (ticking off a few times a month and if there is any change from variables, I put in my savings), I budget what goes into the debit and then the rest goes into savings. Done!  

Answer 5

I can relate to much of what you said. I am an impulse shopper as well. I haven’t had much issue with debt but I do spend mindlessly and have too much crap in the house. I “hide” my money from myself in a savings account to curb spending. Keep it in a separate account that I do not touch. I , too, prefer to use my cash back cards and earn interest on my money. I started a personal no spend challenge this month and it has been so rewarding. Try it!  

Comments

@hamrnand20 I am (was! ) the queen of justifying ALL purchases! Going cold turkey was the best way to curb the bad habits for me.  

Answer 6

I have the same feeling. I actually keep my SF in a savings account and transfer it as needed. My SF total $300 a month and many are not going to be used until the later half of the year, so it didn’t make sense for me to have that much cash in envelopes when it could be earning interest. I only pull out cash for my spending envelopes.  

Answer 7

I put everything on a credit card and track my spending weekly.  

Answer 8

After 7 days of no spend, I rewarded myself with a new coffee mug ( because I only drink coffee made at home now! )

Comments

I always find the cutest coffee mugs at Goodwill and they're only $0. 99. I even found a cute Starbucks one!  

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@kessler15 my son started a new job at a coffee store yesterday. So I had to buy one of theirs to support him. Anybody know Bitty&Beaus coffee?  

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@hamrnand20 ❤️

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@hemocyte cute mug and what a nice way to support your kiddo's journey in learning skills and earning money.  

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Love the mug

Answer 9

When you leave it in your account you are inviting those habits you are having a hard time breaking. to continue. Mindless swiping. Instead make the cash envelopes until you can get your spending under control. Your savings is fine not to touch, but helping YOU help yourself is worth giving up those checking rewards❣️

Comments

@saboteur It depends on the person though. for me personally cash is far more dangerous!  

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I find it scary to take out half my paycheck to put in cash envelopes, but I’m doing it anyway. As a former mindless debit card and credit card spender, it helps to see the cash go. I am much more careful about spending now.  

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I don’t do the cash thing but meticulously track my spending in an app, and I definitely feel that “pain” you mention when I have to record a big transaction

Answer 10

Everyone should  read “Atomic Habits” by james clear. It is an amazing book on making small changes to our daily habits to ensure success.  

Comments

Dang! There's 540 people ahead of me waiting to loan this book from my public library. LOL!  

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@kessler15 it is THAT good. I spent the $14 for audible. I will listen to this over and over again. It’s perfect for personal and business.  

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@hemocyte okay. I will bite the bullet and buy it. either used (if I can find one) or new (if I can't).  

Answer 11

Mindless spending was my biggest issue as well. I didn’t switch to cash at first as I didn’t want to carry it. But the swipe is too easy. So I made the change to cash in January and it cut down a lot of the mindless spending. For me it’s the only thing that helped.  

Answer 12

Miko offers cashless “envelope” trackers. You pretty much track as if you have a cash envelope but with debit card transactions. You can try doing that and see if you are able to keep a better habit of not spending.  

Comments

@warrick Rhea Reveles ^^^ yes! I do this!  

Answer 13

If you can have self control with the credit card do cashless. That’s what I do because I want the travel points. I use an app to track my spending by category and pay off my card every week

Answer 14

I don’t use cash, I use an app called allowance to track my spending. It’s digital envelopes. I put a deposit there, then enter any debit and it shows me my current balance for that account. This is how I do my sinking funds as well.  

Comments

@dixson5 is that an iOS app? I’m interested

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@newness it is. I really love it. It’s just allowance+ and has a pig lol

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@dixson5 that’s what I do! I didn’t like using cash but recognize I don’t have a swiping issue. If it’s not in my envelope, I don’t buy it.  

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@wardlaw exactly. This has worked for me. It takes dedication though to entering- but I usually try to ensure I do it in the car before i drive away

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@dixson5 is that similar to Dave Ramesy EveryDollar app?  

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@olympie no, it’s not budgeting. I’d say it’s more just for tracking electronically the envelopes / sinking funds which you wouldn’t be taking cash out for but using debit on. No transactions can be brought In from a bank or such. You do manually yourself. It’s meant to track allowance for your kids. Lol but I have edited it to be this.  

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You can setup a recurring deposit, so every month it auto fills my ‘envelope’ or I can see what we have in funds easily .  

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@dixson5 thank you!  

Answer 15

Transfer all excess cash into your savings account as soon as you get paid. That way it's not easily available to spend it. Your savings account in a separate bank will keep you from electronically transferring easily. My savings is in a Credit Union while my checking is in a bank. Complete fire wall for me.  

Answer 16

I tried cash envelopes and didn't like it. I'm back to using my debit card and making myself write down EVERY transaction and label what it's for. That helped curb my spending because I would ask myself "Do I really want to write down I spent X on eating out or on a misc nonessential? I do have a couple of accounts to move money into to pay bills and sinking funds so the rest of my available cash is limited.  

Answer 17

Here’s the thing about this. You may be earning 2% on that money. but are you really? Because you’re still spending it. And if mindless spending is your issue then you might be spending as much or more than your 2% reward just by not thinking twice during the transaction and swiping. You might find that by switching to cash, you will SAVE more than that 2% just by retraining your brain to look at your budget and shopping in a different way.  

Comments

@pretext totally

Answer 18

I am a cashless tracker. I don’t pull cash out, but do set up limits for each variable spending category for each budget period (weekly for me). I use Unspent (an iOS app) to track my spending on my phone.  

Answer 19

I hate handling cash. I’ve downloaded a few tracking apps. I don’t follow all of this program to a T. Just trying to reduce spending in general in order to create a sustainable, realistic budget.  

Answer 20

My debt is pretty low too. I track by a note book since mine is pretty basic. I used to spend in sale items or FB buy and sell or Thrift shops. Wasting money. I created my own calendar on poster board for my front door. I listen all my income and expenses on the poster board and note book. I then track everything in my note book and carry everywhere. I aim to spend 600 on groceries and 200 on gas on my Visa. For cash back savings.  

Comments

No cash envelope for me. My first page in note books is all income and expenses that are fixed rates. then each pay check I note I paid off. I also have a side list of things i need to buy like school photos, sports registration, dental bill. After my debt is paid off I can start sinking funds and emerg funds.  

Answer 21

I allow some money in my budget, just for sale items, clearance—things I know we will use, or yard sales. I have trained myself to not buy something unless I have a plan for it

Answer 22

I want to know what bank you can have a savings acct that gets 2% interest? The highest around her is about . 5%. Not kidding.  

Comments

@mycobacterium To get 2%, it is likely an ONLINE bank - no physical bank you can ever go into. I have a Discover Online Savings Acct. and it earns 1. 6%. She may be locked into a promotion, also, that is no longer available.  

Answer 23

I don’t like having a lot of cash in my purse or hanging around my house so I use the Jordan Page method of envelopes. I actually write checks for groceries and personal health items. And misc and fun are my cash envelopes. So I have a hybrid system. Works for us and keeps us on a budget.  

Answer 24

I do not use envelopes. I create written envelopes in my budget binder instead and track the spending from each. Basically like a category section.  

Answer 25

I don’t use the cash method either but I track all my spending in an app called Daily Budget and it provides that same psychological barrier to mindless spending. I hate to have to record any purchase that will put me in the red so I end up not buying a lot of things!  

Answer 26

Someone here mention the app simple budget it is great just like envelopes but digital you create envelopes start with a balance then can add and subtract. So I still do the different envelopes just don’t take cash out. I hated putting cash in each one then I wold just keep pulling.  

Answer 27

You should do whatever works best for you.  

Comments

I meant if you don’t want to use cash, you don’t have to.