How I Manage My Spending Without Cash Envelopes

by Marian Nguyen, RN, BSN | Sep 18, 2020 | Family and Life Skills, Habits, Money Skills

Do you use cash envelopes? Or do you know someone who does? Or maybe, like me, you’ve tried it and hated it!

Cash envelopes are a really good tool for some people, but not me. I’m here to tell you about why I don’t like them and what I do instead to keep my finances organized and how I manage it all.

Spoiler alert: my system is easier and much more simple! 

Who are Cash Envelopes Good For?

Cash envelopes are a great option for people who really need to have that control. These are people who don’t want to be tempted to overspend on things.

It’s also great for people who need the visual of seeing that a particular envelope is empty and knowing that you’re done with that for the week or month. 

Why I Don’t Like Using Cash Envelopes.

Using cash envelopes can be a lot and it can get overwhelming and confusing. You have to have all of these envelopes and all this cash on you at all times. You have envelopes for groceries, eating out, paying bills. If you don’t want to keep the cash on you at all times, you can leave your envelopes at home. But, if you leave them at home, when you’re out and about, you could end up needing it but you won’t have access to that particular envelope at that time. That’s a little inconvenient.

It can also be a bit dangerous to keep that much money on you. What if you lose it or it’s stolen?

Additionally, it takes more time. You have to go to the bank and take out a specific amount of cash. You might want specific dollar denominations so you need to have the teller take care of that for you. Then you have to take all of that cash and divide it into all of the envelopes. It’s a completely manual process and it’s time consuming. 

Cash envelopes can also be tricky if you have more than one family member who needs to spend from the same envelope. How will you handle that? Will you both take money from the envelope or will one person take the envelope and the other take some money? What if you end up not having the right amount of money? This process can just be a bit inconvenient. 

What I Use Instead.

My family uses a quick and simple app called, YNAB. YNAB stands for You Need A Budget and it’s personal budgeting software available for Windows, Mac, and iOS. What I love about YNAB is that it’s super simple for me to divide and budget our funds into different categories. Then my husband and I can see what we have left to spend by simply looking at the app on our phone. 

In the app, we set categories for all of our monthly expenses. When you add your budgeted amount to each category, it is automatically deducted from our monthly total. This might seem like a lot of work, but it’s really so quick and easy. Each month, it only takes me a matter of seconds to update our budgeted amount for each category, as opposed to all of the time it would take with cash envelopes. 

Best yet, it updates instantly on all connected devices so my husband and I can both see, at all times, exactly how much money we have left in each category. 

Hopefully, now you have a better understanding of a way to budget that is different from using cash envelopes and you can see if, maybe, this is a system that you would prefer. Let me know, which system has worked for you in the past or which system you think would work best for you and your family. 

Do you like the idea of  having access to your budget on an app on your phone at all times? I’d love to offer you a done-for-you/done-with-you family budget program! One where I will hand deliver a fully set up and organized YNAB budget plan based on your flow. I’ll work side-by-side with you to develop a routine and process to keep you on top of your family finances once and for all. Schedule a free 15 min call with me! Find out if we’d be a good fit and how I can help make it happen for you!