Practical Tips for Using Cash to Stay on Budget

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These days using cash for daily expenditures seems cumbersome. Although using cash may seem archaic, many debt reducing programs encourage the use of cash. Several years ago, my husband and I decided to use cash for some expenses in lieu of a credit card as we paid down personal debt.

We had read about Dave Ramsey’s cash envelope system and reluctantly decided to give it a try. We began by identifying areas in our budget that we typically overspent. Once those areas were identified, we agreed on a realistic budget for those areas, withdrew the needed cash, placed it in an envelope and labeled it.

After years of working with our budget, we have discovered key areas that cash continues to assist us to stay within our budget. Line item budgets that we personally continue to use cash for are eating out, vacations, babysitters, and allowances.

Here are some tips that we have discovered that make using cash a little easier:

Set a realistic budget before the month begins: The key is to be realistic. When we determined our first budgets, we examined bank and credit card statements to determine our average expenses in certain areas. As a challenge to save money, our budgets were set to be a little less than our average spending. 

Visit a bank the first day of the month:  It is essential to visit a bank no later than the first day of the month to withdraw cash and fill up the envelopes. This is important because if a credit card has to be used prior to making the trip to the bank, using cash becomes more complicated and confusing.

Spend only what is in the envelope: Adding cash to the envelope half-way through the month makes the system obsolete.

Keep your cash on you at all times: I have had people reuse envelopes or grocery coupon holders to keep their cash separate and easily available. If a credit card is used due to forgotten cash, it can create confusion. Some people find that the envelope affords space to include receipts in case there is any question to how the money was spent later.

Create a flex spending budget: My husband and I found that designating an allotted amount of cash to each other every month helps reduce our bickering in the instances we do not agree on expenses. He often chooses to eat out more for lunch with his money, and I often save mine for clothing that may not be budgeted. We are finding an allowance also assists us with our oldest daughter. We found that we were constantly bombarded with things to buy from school, but now she makes choices based on her allowance that she earns.

Plan ahead: Whether it involves reviewing restaurant prices, taking advantage of restaurant specials or understanding the possible expenses during a vacation, the more that is planned ahead, the longer our cash lasts.


Writer Bio: Summer Bolte


I spend most of my time and days with my three kids, husband and dog. My kids frequently play near me as I garden, cook, DIY and volunteer. My most unusual paying job has to be feeding fruit flies in a research lab, and my most fullfilling job was being an oncology nurse for seven years.  


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