According NerdWallet, the average household now holds over $16,000 in credit card debt. This statistic is staggering. While using credit might seem like the simplest way of paying for things, it’s not always what makes life simpler. You see debt doesn’t simplify things; it complicates things. Instead, I encourage you to simplify your finances by using the cash envelope system.
When we began implementing a cash budget for our monthly expenses (groceries, household, gasoline, etc.) we instantly began to stick to our budget! Honestly, when we switched to cash, I was expecting a lot more work and stress. But it’s been so freeing and has really simplified our lives in so many ways. It can create peace and simplicity in your life too!
You see, cash might seem like just one more thing to worry about when you are dealing with budgeting. It can seem overwhelming to deal with that much cash. I get it. But the reality is, cash gives you limits. It forces you to stay within your budget and it gives you the freedom to spend. Cash is finite so when it’s gone, it’s gone.
Cash can make life easier for you too. If you choose to implement a cash budget, there will be 4 ways in which your life becomes easier.
4 Ways Cash Makes Life Easier
1. No More Worrying
By using cash, you will no longer worry if the money will be there to process the payment or pay off that card. You won’t stress about how you are going to make your payments. When you go to the store, you will have the cash in hand. Sure, most of us will worry about money from time to time. But the freedom you will feel when you go to the grocery store with cash will be amazing.
2. Spend Less = Less Stuff
Your home will reap the rewards of your new cash budget as well! When you only have a set amount in your budget, you won’t bring home all those extras! (Target Dollar Spot, anyone?!) You aren’t going to throw those few extra things in the cart at the grocery store when you’re on a cash budget. When you go shopping with your spending money, you will be more selective because you only have so much to spend. Simplifying your budget will also simplify your home!
I’ve really found this to be true in our family. I used to be one to pick up just a few extras at the grocery store. These little extras would very quickly become clutter in our home. I was in a constant battle with purchasing and purging. But now, I’m much more intentional with my purchases because I’m limited on how much I have to spend.
Related: The True Cost of Our Stuff
3. Money Fights are Almost Non-Existent
When you use cash, there are less questions of,
“You spent how much on that?”
“What is this expense for?”
“Why was our credit card bill so much?”
Now I’m not going to lie and say it completely eliminates money fights. We often disagree on how much to delegate to each budget category. My husband is the saver and I’m the spender. He holds onto money with an iron fist and I’m over here like, “Let’s go paint something!” It’s just part of marriage!
However, using cash means we both know how much we have for each category, when the cash is gone we are done spending for the month, and there is no questioning or accusing each other of spending money we didn’t have. When you use cash, you know the money is there to spend.
4. Reconciling Your Checkbook Becomes Much Simpler
When you only go to the bank once or twice throughout the month to take out all of the cash that you need, you have very few transactions to enter into your checkbook register. Reconciling your checkbook becomes much simpler when you don’t have dozens of debit card purchases to enter.
We have trimmed our checkbook register down to our automatic payments for bills, 2 cash withdrawals, a handful of debit card gasoline purchases (we still use debit for gas), and a few checks we write out for bills. I can literally reconcile my checkbook in 10 minutes each month!
Why We Love Using Cash
I love the peace I feel when I spend cash. Just the lack of worrying is enough to keep me going with this budget strategy. I’m so happy to have found such a simple budgeting system. If you need help implementing a cash envelope budgeting system, check out my budget binder which is centered around the cash envelope system!