There were times when I thought that I was crazy for using cash on discretionary expenses. Why do I need to do this? I hate coins in my wallet. Now I have to reconcile my cash transactions manually. Who has time for this? Look, that guy’s using his debit. Why can’t I do that?
These are the thoughts that pop up in your mind every time you pull out your envelopes – especially when you’re first starting out on your cash-only system. There are many benefits to using the cash, especially because something physical maintains its value in the eyes of the user. I must mention that the “cash-only” system is not usually a strict ”cash-only” system. There are certain payments that we have which are automatically pulled from our checking account, and others that require a debit card.
The real value a “cash-only” system comes from using cash with discretionary expenses. If you use cash for things like entertainment and groceries, you’ll find yourself having a more difficult time forking over the big bucks.
So, does it make you insane? I think not for a number of reasons already mentioned. Besides saving money, you’ll become more intimate with your finances. This will help you know how much money you have and where it is going. It will also help you create a budget to get you on the right track.
Using cash is a visual process, which translates into an emotional process. I have never felt emotionally connected to my money when I was swiping the card. Never. It was as easy as swipe, pin, and sign. However, when I use cash, and especially when I receive some rotten pennies back, I almost shed a tear. Okay, maybe it’s not that bad. You get the point though.
To sum it up, here are some key points about the “cash-only” system:
- It keeps you knowledgeable about your finances by requiring manual entry into a register (transaction-keeping notebook or software).
- It gives you power to negotiate with small businesses and local merchants. You’ll find yourself saving money by flashing those greenbacks in front of people who need them.
- It runs out. Because credit and debit cards pull money from one source (checking/credit accounts), they are not good ways to categorize your money. Using the envelope system helps you see what you have left in each category and not overspend.
You’re not insane. If you’ve been using cash for some time, know that you are on the right path. You are staying intimate with your financial situation and not in crisis denial. This is making you a better person. This is helping your family stay on the right track. Keep up the good work, and know that you’ll have great support here. I applaud you for using cash!
! John wrote two articles for the book: "Budgeting for Groceries" and "How Grocery Stores Work."
