I have learned a few things after using the cash envelope system for a month. Not the least of which is how difficult it is to stay squarely within a budget!
Although I tried The Envelope System last summer, the lessons I learned have stayed with me. Now that we are flush with some cash in our bank accounts, I wonder whether I should try using cash again, but reconsidered.
Here’s why …
Cash is Not King
Despite my idealistic efforts to have no exceptions to our “cash only” policy, there are certain expenses where cash is exceptionally more difficult or more expensive to use. First is for gifts that I need to ship. I have couponed to find great deals on great gifts, but they cost three times what I paid to mail them. For that reason, I tend to purchase gifts on Amazon if I need to ship them. Amazon doesn’t take cash 😉
Second are the services that have become much more efficient through the use of credit cards. In particular, the gas station. Do you want to go back to the time when we had to walk to the cashier, pre-pay for gas, walk back out to our cars, pump, and return to the cashier for our change? I don’t. I’m busy and I’m lazy. And I usually have a toddler strapped into the car.
These inconveniences can be mitigated by using a debit card, but I’m not so exception-phobic to resort to a debit card. With the way banks debit and deposit money into and out of accounts, I don’t trust myself not to screw it up when our funds are low.
Cash is Dirty!
Maybe I just got a particularly stinky batch of cash for change, or my Peace Corps training is indelibly imprinted on me, or maybe it’s because we have a toddler in the house, but I kept having an irrepressible need to wash my hands after handling money.
Our Budget is Unrealistic
I tried to stay under $500 on food costs in August, and no one was happy. It meant that Little Stapler didn’t get his favorite snacks, we couldn’t afford some of the fancy coconut milk ice cream I was devouring that month, and Mr. Stapler ended up using personal funds to buy his lunch frequently because we didn’t have anything in the house that he wanted to eat.
On the plus side, not buying ice cream and some random snacks has helped me lose weight that month!
In the end, I learned that using cash can be an excellent way to test the viability of your budget and to stay within it. That is, if you don’t shop online at all. And don’t mind paying for gas with cash (or you never need to fill up because you ride your bike everywhere. Wouldn’t that be awesome?!)
For certain budget categories like groceries, which are nearly always bought in-store, in-person, it would be ideal in terms of logistics. The big catch is: Are you going to spend less on food if you bring less money to the grocery store? I’m going to guess that the answer is “no.” To spend less on groceries every week takes more than cutting out certain food items. Sure, you can opt for the large value packs of chicken breasts instead of the individually packaged chicken that costs $1 per pound more. Unless your grocery cart is full of similarly unnecessarily convenience-packaged items, it’s not going to make a dent in your budget. To spend less on groceries takes a little time and a little planning — time to review sales and match coupons, and time to plan your meals for the week (or month!) accordingly.
Stay tuned, though, because although I’m not going to the cash envelope system for grocery shopping, I am getting back on the couponing wagon. I’ll show you how you can, too!