Wait! What? A cashless cash envelope system?
Yes, you read that right!
If you know me, you know I LOVE using cash. In fact, the cash envelope system is what helped me control my spending and take control of my finances.
I love the control of just using cash because when it’s gone, it’s gone, but you can use this same method without using cash. Opting to use the cash envelope system using a debit card does take much more self-control but once you have your system down pat, it becomes very easy.
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What is the Cash Envelope System?
Very simply put, the cash envelope system is a budgeting method where you use cash for your monthly variable expenses.
Basically, you create a budget using your expected income and expenses. After paying your fixed expenses, you use the leftover money for your variable expenses. This is the basic premise if you are using cash or going cashless.
With the cash envelope system, you figure out your top spending categories for your envelopes, pull out your allotted amount of cash for each category on payday and stuff your envelopes. You use the cash as needed for each budgeted category but once it’s gone, it’s gone – no more spending!
In my opinion, this is a great method for everyone, especially for those that have a hard time sticking to budgets and find themselves overspending month after month.
Want to learn more about using the cash envelope system? Read my detailed article HERE explaining more about the process.
Cons of using the Cash Envelope System
As I have stated in numerous articles, I love using cash. Developing my own cash envelope system truly gave me the power to take control of my money and stop overspending.
Recently, I saw my biggest downfall of using cash. I didn’t want to go to the ATM or have to handle cash. This made me think of other reasons you might not want to handle cash.
A few cons to using cash:
- Going to the bank might be inconvenient.
- Carrying large amounts of cash may put you at risk for loss or theft.
- You are losing out on cashback rewards.
- You won’t accumulate possible interest on accounts.
I’m sure there are a ton of other cons I haven’t thought of. Because of this, let’s explore the envelope system without cash.
The Cashless Cash Envelope System
Well, the idea of the cashless cash envelope system is the same as using actual cash. The system is designed to stop you from overspending.
On payday, tackle and pay your fixed expenses first. BUT…instead of running to the bank and withdrawing cash to stuff your envelopes use a cashless envelope tracker printable to track your spending.
How to use Cashless Envelope Trackers
The idea of the cashless envelope trackers is the same as the cash envelope system, just without the cash. Instead of carrying around a few envelopes filled with cash, you will carry the trackers to document your spending.
It’s really very simple. Print the trackers and keep in your purse or wallet. Record the spending category and amount in the space provided and then track your spending as you use it.
Using the cashless system requires you to be more disciplined with your spending because you can easily use more than what your budget calls for. It is crucial when going cashless to track your spending. Writing down every purchase and deducting from your total so you know your new budgeted amount is important every step of the way.
You must remember and condition yourself to not spend a dime more than your spending limit for each category. Just as with cash, you should not move your funds from one tracker to another. This system is designed to teach you to control your spending.
If you find you run short consistently or have overages, you need to reevaluate your budget and make the necessary adjustments.
You can grab your cashless envelope tracker printables HERE. I love to print mine on cardstock for a sturdy version housed in my purse.
Recap of the Cashless Cash Envelope System
Hands down, the cash envelope system is my favorite budgeting method. Whether you use this method with cash or without, it is an amazing way to teach you how to be disciplined with your spending.
Tracking your spending in this manner will also create good spending habits – writing your spending down tends to do that. 😜
To wrap up, let’s go over the steps you need to start using the cashless cash envelope system:
- Create a budget.
- Track your expenses.
- Choose your top spending categories.
- Set your spending limits for each category according to your budget and prior spending.
- Pay your regular bills immediately after payday. I use a budget calendar to keep my bills and paydays organized.
- Print and fill out your cashless envelope trackers. Place these in your purse or wallet.
- Track your spending for each category and update your remaining balance after each purchase.
The Cashless Cash Envelope System might be what you’ve been looking for to help you control your spending. Don’t forget to grab your cashless envelope trackers here and get started right away!