Financial Friday: Cash Envelope Month!

Untitled design (3)

We wanted to do something valuable with the motivation of January, and we knew that there was a lot we could consider but have already tried to budget well. So this month, we went pretty extreme: other than mortgage and fixed bills, we’re only using cash this month.

Why? That’s a good question. It turns out, people are more willing to spend money when they only are using plastic than when they spend cash. It feels more finite to have an actual pile of twenty dollar bills for the month than to have a certain amount in a bank account and just swipe a card all month. It’s a psychological thing,

So we figured out how much we were willing to spend in a month for each budget category, a bit for groceries, a bit for gas, etc. We put that much cash into an envelope and labeled it. We figured that this way, we have a physical budget: if we do something that costs more than what is in one envelope, we’ll have to get it from another envelope, and thus reduce spending in that category.

Granted, it is pretty artificial since we still have cards we could use, but the hope is that we’ll spend less than usual and think more about what we are spending money on. Already, we’ve put off a few non-essential purchases because we didn’t want to run low on cash, so I think some of the needs will go away as well.

If something comes up that we need to address without cash, we’ll do it, but the goal is to become more aware of our spending so that we keep from letting our spending slowly creep higher and higher. Maybe it isn’t necessary, but we’re trying it to see if there is anything to learn!

13 Comments, RSS

  1. livepositiveblogblog January 12, 2018 @ 8:58 am

    I think this a brilliant concept and I wish you well with your endeavours. Please will you do a follow up post to let us readers know how you got on. I hope you don’t mind but I took massive inspiration from you and have set up a 18 challenges for 2018 for myself and created a closed faceboook group where my friends and Colleagues and family can update their goals. I did say that I followed you on WordPress so hopefully you may have some new UK readers.

    • lauramleavitt January 12, 2018 @ 3:10 pm

      So glad you got inspired for the new year! Thank you for your comment and may you have great success!!!

  2. juliehcares January 12, 2018 @ 11:27 am

    If I don’t have the cash, I don’t buy it. That’s how I’ve been living for a couple of years and it works well for me!

  3. Shehla January 12, 2018 @ 7:43 pm

    I like this idea of yours and will try it too personally.

  4. AJ January 12, 2018 @ 9:00 pm

    what an awesome idea!

  5. Melanie B January 12, 2018 @ 9:16 pm

    This is a good idea! Thanks. I will share.

  6. blissfullycreating January 12, 2018 @ 9:30 pm

    we have used envelopes too! it definitely helps!

  7. My Way Home Life January 12, 2018 @ 10:39 pm

    We use envelopes all the time to save for both long and short term projects….makes it more concrete for us.

  8. FindMoreMeaning January 12, 2018 @ 11:11 pm

    I love the idea of cash envelopes. I think implementing this for a month even, just to check your spending habits and where you’re spending the most money (and where you may have to “borrow” from) is a great awareness technique. I’m planning on focusing on my finances in February, and I may try this idea!

  9. Cathryn January 13, 2018 @ 10:00 am

    I started this method with our groceries or eating out – Food $$$. It makes you think about how you are spending your $.

  10. Claudette January 13, 2018 @ 10:56 am

    Great tips! I’m familiar with the concepts, too.

    We’ve done this with summer vacation for all the endless ‘let’s stop for ice cream’ or ‘can we go to the amusement park today’ suggestions! It works great and I will do it again.

    I also use a money jar for small change or small bills around August leading into September. By the time they start school they come home requiring $5 for this $10 for that and i just reach into the jar and take it out.

  11. ebonierika January 17, 2018 @ 5:41 am

    It works

    • ebonierika January 17, 2018 @ 5:43 am

      Every budget app is also helpful

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