It looks so much more valuable when you have it in your hand! I always found it easy to convince myself that what I had spent seemed a lot less. Unlike credit cards or debit cards, where you can just tap or swipe. When you need to spend your money, because you need to pay at the till, suddenly your budget becomes real, with real rules. When my time came to manage money, it was all about debit and credit cards, and no REAL coinage in my hand. Mr Budget goes on about – put it on a spreadsheet Elly, it’ll save you time.Īnd yes, he’s correct, but for all the pretty little spreadsheets in the world, I have never had one that made me actually stick to a monthly budget.Īs a thirty something, I vaguely remember when my mum used to use cash all the time. Ok, so abstract thought doesn’t work for me with money. You can see the cash reduce as you spend. With cash envelopes, you can physically see the money – it’s tangible and not just an abstract idea. If you’re anything like me, I tend to overspend if money if it’s not in my hand and physical. The budget is determined by what you can afford. You have different amounts of cash stored in different envelopes. The theory is that you will be more likely not to overspend, because you are handing over real cash and not just tapping a card reader. It helps you save money by having the money physically in front of you as you pay for items. What is the Cash Envelope system?īasically it’s all about taking budgeting back to pure cash. So today I will show you how you can rely less on your cards and really benefit from a cash based budget. This year, I fully funded our holiday spending, just based on cash – I finally ditched the credit card! With my tracker sheets, I can see what I have spent, in which budget area every month. I was able to save $1000 for an emergency fund for us, which has led to a more peaceful life for me and my husband, if unexpected expenses come up. Not only has it helped me pay off close on $25,000 of debt on one modest salary, it has helped me really understand and get control over where my money is going every month. I base my budget around the time I get paid. The method that resonates with me and makes most sense seems to be the monthly budget model called the cash envelope system.
During this time I have tried every budget method under the sun, from spreadsheets to apps. For most of you that know me, you will know that I have been budgeting seriously for the past year and a half now.