Hi there! Thank you for being here! I’m a little late to the game as I just launched my online C(r)ash Course on Personal Finance – 21 Days to Organize Your Money and Your Life! If you are in there, let me congratulate you on taking yet another step towards the life you want to live.
I know it can seem like a very small step but believe me, all the steps count. And if you aren’t in there yet, don’t worry, you were not ready. I truly believe that we are exactly where we need to be. I know that for me, things need to happen when I’m ready and it doesn’t matter how many times someone says to me “Do it! You need this!”. I will only do it when I feel ready and not a second before. I sometimes need to see results, other times I’m just not ready, and tat’s ok.
Cash Envelopes
Today I want to talk about cash envelopes, without the actual cash. I love a cash envelope because it’s harder for me to spend. If I see real money in my hand and I give it to someone to pay whatever I’m buying… I feel a little bit of panic, especially if there’s no more left in the envelope. And there’s no more in the, it means there’s no more until the next paycheck!
The other day I made a TikTok of my cash envelope wallet and someone commented that I was an idiot for telling the whole internet that I keep cash in my house! That seemed like a fair point! But, the truth is, the system is the same but the reality is slightly different! You no longer have to keep cash in the envelopes to follow the principle.
People usually argue that they don’t want to carry cash around and it’s dangerous, and who has cash anymore… Well, I do! And you will too if you stop spending what you don’t have, just saying. But getting back to the cashless envelopes. It’s so easy to get a gift card from the grocery store where you buy your food and just charge it with the amount of money you have for groceries for the week or the month. Then you just keep track of what you spend! It’s as easy as that!
Cashless Envelopes
You can get a Prepaid Visa Card, you just put the amount you have for the grocery category and you are good to go, again, you just keep track on a small card inside the grocery envelope of the amount you spent and that’s it! You can do this for coffee, gifts, clothes, whatever, because a Prepaid card is like a regular card except when the money ends you don’t have anymore, just like Cash!
Now, is it the same as using cash? No. Just like I ask you to budget with pen and paper and not an app when you first start budgeting, there’s something that happens to your brain when you see the actual cash leave your hand that doesn’t happen with a card. You don’t see the actual transaction, the money exchanging hands, and that can be beneficial.
But this is the next best thing. It will keep you from using a credit card or even your debit card, especially when you know you have money in the account, you tend to overspend. But you can’t spend what you don’t have. This will be hard for the first couple of times, especially if you need to put stuff back on the shelves, but it will help your budget.
No more excuses!
Of course, I talk about this for those of us who have a hard time sticking to a budget. If you trust yourself to only spend what you said you were going to spend, awesome! This post is not for you! But chances are you do find it challenging, so how do you keep track of what you spend? Well, that’s where the envelopes come in. Inside each envelope, you’ll have a small note card and your prepaid card. Each time you use the card, you write the amount spent on the note card. This will help you know if you have reached your limit. It will also help keep all the different cards organized.
Form some categories, I do use cash, for others I use my debit card. And even now, I see that the overspending happens in the categories I use the debit card. Because I know there’s money in the account so I don’t pay as much attention as I should. For example I overspend on Amazon and iBooks… can you guess why? I have my debit card info saved on both! I know I can’t pay with actual cash but if I were to put in my info each time I wanted to purchase something. I know I wouldn’t purchase as much.
Controlling the Spending
One way I’m trying out to keep this under “control” is, research whatever I want to buy and wait a day, if I still want it and have enough money from my allowance I get it, if not… I don’t. I sometimes put it under “things for the house” but they are actually for me… I’m trying to not do that. But again, all of these categories have set amounts so… It’s not overspending per say… Here I am justifying the unjustifiable! I will be working on this issue… I promise!
As you can see, I also “adjust” my budget to fit my life! 😬 I don’t think there’s anything wrong with it as long as you don’t go over budget because you spent money on things you shouldn’t. For example if at the end of the month you have money left over from one category, for example, clothes, you can spend it on books! Or from the “house & garden” category, you can buy a pair of shoes. You probably shouldn’t but, the money is there, you have already paid all your bills and are on track… I see it as outsmarting your budget! It will help you stay motivated if you can find small amounts unexpectedly that you can treat yourself! I love when that happens!
