Why the Cash System is Stupid (to me).



I told you we’d managed to buy all our consumables for $500 last month, but when it came time to look at the cold hard numbers, I realize I lied.  (Payday for us is once a month on the 25th, which is why we don’t operate on the “normal” month.)

The problem is, I don’t really know where and how we spent our money because of the stupid, stupid, stupid cash system.  (I’ll try to be subtle with my real feelings, mkay?)

I know that all the debt avoidance persons tell you that boo-koodles of cash filled envelopes will keep your budget on track, but that does not work for us.  I am not sure why, exactly, but here are my speculations.

  • We are not in debt. Maybe this only works if you have engrained plastic usage issues, which we don’t.
  • I am as klutzy as a drunk-monkey.  That God trusted me with children is astonishing.  Untraceable green papers of value shoved in a purse that is overloaded with receipts, bandaids, mascara, sunglasses, sermon outlines, sippy cups, and a phone proved to be too much for me to handle.
  • I am frivolous and silly.  Cash makes me feel rich and entitled and untraceable, like I’m off the grid. When you are off the grid, you can buy all kinds of stuff without THE MAN knowing about it.  I don’t mean the ProvidinaTOR when I say “THE MAN.” I mean the BANK.  When I have cash, I buy all kinds of dumb stuff despite the envelope’s designation.
  • Cash people don’t get receipts. When you spend cash, it seems that the cashier assumes you don’t want a receipt.  Or you buy things that don’t get you a receipt. Or . . . . you get home and the groceries are put away and you don’t know where the receipt is, but there is only $8.95 left in your wallet.  You think there should be $28.95, so did you drop $20 on the FLOOR? OH CRAP!!! You look around like a crazy lady for your $20 bill.  Eventually you find it in the side of the Pull-up bag because you didn’t take your purse in and you just took four twenties and maybe the bill was only $60 OR YOUR HEAD WILL EXPLODE IF YOU HAVE TO DO MATH and find your own money. (While you are looking, the three-year old walks into the street.)

So, WHY, I ask, would I think I should switch to cash?  Why? Why? Why?

Speaking of math, and the MAN, and knowing things, I am pretty uptight when it comes to budgeting.  In the early days of being a tightwad, I used to gleefully sit down every night and enter in all my receipts and bills into my check register.  Then, I found Quicken, which does it all for me and uploads my bank transactions.  It even categorizes my spending and aligns it with my budget.  It’s a nerdy poorganic girl’s dream come true! Now every morning, I update our Quicken with the day’s bank transactions to see where we stand.  For us, it is a good system that keeps me accountable, in budget, and out of debt.  Cash did NOT do that for me.

According to Quicken, we spent $500 and groceries and $160 on household, putting us a whopping $160 overbudget.  GASP!!

Frustratingly, I don’t really know if those numbers are totally true because most of that money was a cash withdrawal that I marked in the system as “grocery.”  However, in point of fact I must confess, I am certain I did not spend that cash exclusively on groceries.  I spent some on medicine, a child’s birthday present, my kid’s allowances, my fall Bible study book, etc. BECAUSE, why not!?!? I had cash.

All the other errors of the Not-so $500 month, I cannot recount, though I suspect we ate too much cheese. It happens.

Let’s have a do-over, shall we? I’m going back to my trusty debit card. I’ll let you know how it goes, um . . . sometimes.  As I confessed to some friends last night, when I blog a lot, it means we are awesomely poorganic. When huge chunks of time go by without posts,  you can assume that I’m eating pie sweetened with sugar and reading novels. Send me and intervention e-mail when that happens, won’t you? (Actually, this month, I HAVE a real life J-O-B, so that is a tiny excuse, right?)

How did your $500 month go?

Posts right to your E-mail!

Subscribe to our e-mail newsletter to receive updates.

29 Responses to Why the Cash System is Stupid (to me).

  1. Kelli September 28, 2012 at 10:54 am #

    I did not do a $500/month challenge (our grocery budget is actually MUCH lower than that!), but I LOVED this post. We DO have debt, and are over our plastic issue, but still paying off our bad habits. BUT I will say, that cash is VERY bad for me. I keep track of it well enough, but your remark about being “off the grid” is so true. I am better now, but I know that for me, cash in my purse is BAD! Knowing you have a problem is the first step! :). Also, the sober realization that I was misusing God’s blessings for our family does much to keep me on the straight and narrow! Thanks for your honesty and humor!

    • Katrina September 28, 2012 at 11:16 am #

      Ooo, do tell. Well $500 is for groceries AND paper/household goods–not just food. But I’m dying to hear some tips on how to actually achieve this number from someone who keeps it even lower. Dish! What are your best tips and secrets?

  2. Kimberly September 28, 2012 at 12:03 pm #

    We actually do $250/month for all groceries and household goods. I’m not 100% organic, but I very, very rarely buy processed foods and/or junk. I coupon enough to get most toiletries, cleaning items, and paper products for free or very cheap, so that helps a lot. And we do use all cash for things like groceries, eating out and clothing. When we first started the cash system, I did keep very close track and wrote down every single transaction, so I could know where my money was going (and I ALWAYS got a receipt to make sure I knew). Now, since it’s been a while, I don’t usually write it down, but I’m pretty good at not spending cash on other items. Usually, anyway.

    • Katrina September 28, 2012 at 12:29 pm #

      I used to be a hard core couponer and our budget was less then, but my time for couponing has been replaced by meal-prep (and blogging) about real foods. So our costs have gone up, plus my kids, who I used to not really worry about feeding when they were small, are eating like FIENDS. I am not kidding when I say that my 7 year old eats just as much as I do if not more. It is crazy. I am hoping to resume couponing for non-foods and have meal planning get my spending more under control for groceries.

      • Lee September 28, 2012 at 2:20 pm #

        @Katrina: It is amazing how much they start eating all of a sudden. My nine year old (who weighs only 60 lbs! and is as skinny as a rail!) can definitely eat as much as an adult at dinner. It’s satisfying to see her go back for seconds of the pulled pork, but I’ve definitely had to readjust my food prep if I want to have leftovers.

  3. Kimberly September 28, 2012 at 12:04 pm #

    Oh, I meant to say, for our family of three: husband, me and 2-year old.

  4. Mary September 28, 2012 at 1:33 pm #

    Cash doesn’t work for us either. I use Amex for all of my purchases then I earn miles (which gives me and hubby a free flight every year) and I have a paper record of everything I purchased for the month. I can keep track easily how much I spent at the grocery store, Starbucks and other things. Mint.com is nice too which gives you charts for spending categories. I never have to create charts or logs it’s all done by Amex and mint and I can see the month or year easily and make adjustments for the future. It’s easy to forget about purchases when you spend cash but this way everything is accounted for including gas, house and car maintenance and children’s necessities for school which is often overlooked in budgeting.

  5. Mary September 28, 2012 at 1:44 pm #

    Also, I just read these 2 posts last night on where to buy the cheapest organic items.

    The Trader Joes list is at http://www.100daysofrealfood.com

    and Costco’s list is at http://www.southernsavers.com/2012/08/organic-living-journey-costco/.

    Hope that helps your budget :)

  6. Lee September 28, 2012 at 2:16 pm #

    Yup, this is exactly why cash wouldn’t work for me either. It just kind of … flies away. Someone needs a dollar for the mystery known as “snack sale”, the library clerk buttonholes me about the $2 fine, I decide to build up the emergency cash stash (for when the earthquake hits and all the ATMs are down) and how the heck do you track that one, anyway? Because I haven’t spent the money, but it’s not available to me. arrgh!

    Like Mary, I use Amex which is tied to a cash-back loyalty program. Love logging in and reading the statements on line and seeing exactly where the money went — except, of course, for when seeing where the money went makes me want to scream (“HOW MUCH for that car repair?!).

  7. MyPeaceOfFood September 28, 2012 at 5:04 pm #

    I’m half counting down the days until this month is over and half dreading it because I think we will end up about $600 over budget. I know, that probably sounds HUGE. Luckily I was able to transfer some funds back and forth, but that makes me feel SO GUILTY AND STUPID. That does include formula and diapers, but…it’s still scary and frustrating and makes me feel bad. I feel like I’m constantly buckling down more and more. With any luck October will go more smoothly!
    MyPeaceOfFood recently posted…Feeling goodMy Profile

  8. Stephanie September 28, 2012 at 6:42 pm #

    I agree with you. Carrying around cash makes me spend more. Even if I just took the money out of my bank account, my brain says, “hey, here’s a wad of free money that I can spend without my account balance getting less!” And then I do…

    It’s mostly debit for us, we do have a credit card for online purchases and buying gas, just in case someone steals our identity or something, but we pay it off every month.

  9. Melissa September 29, 2012 at 8:31 am #

    Once again, you know how much I appreciate your honesty and with a bit of humor, well, it’s just good reading! I have never tried the cash thing, but I think I would probably fail at it. I keep very little cash with me (like sometimes $1.00!), so I tend not to even think about using cash for purchases.
    We do have a credit card with cash back, which I’ve found to be awesome. We pay off the balance every month, therefore avoiding any additional charges. And, the cash back rewards allows me (yes, just me, nobody else gets a chance!) to buy gift cards to stores where I would normally shop (Kohl’s, Target, CVS, etc). It’s probably a psychological game, but i feel like I get great deals. I also try to combine my gift cards with store sales and coupons, which helps too. I know the finanacial strategists say no to credit, but it works for us!

  10. Rebecca September 29, 2012 at 10:38 pm #

    I can’t handle cash either. I do way better with credit card (we pay them off bi-weekly) and only a small amount of cash for the farmer’s market AND Quicken. Plus we get points on our credit card that we can use for the occasional hotel stay during a family trip. And I can’t keep my budget to $500 dollars a month. I can come close some months if I dig into all of our stocked or bulk type items but then the next month I have to replenish and therefore I go over budget. Our budget is more like $700 a month. We have 2 adults and 4 kids.

  11. Kay Bruner September 30, 2012 at 10:27 am #

    We stay around $500/month on groceries. We have two adults, and three teenage boys in our house right now. I can’t coupon. It makes me insane. No matter how many times I read Katrina’s tips, I was hyperventilating by step 3. The cost of xanax was going to way offset the savings in coupons. So I buy my paper stuff at Costco. Also frozen organic veggies and chicken breasts. Pretty much everything else comes from Aldi. I cook from recipes, which I think you have to do if you want to keep it cheap. We eat less-meat. So the other night I made sloppy joes, half meat, half veggies zoomed in the food processor (zucchini, mushrooms, carrots). We do cash for the groceries, but we’ve done it for about 5 years now, worked the kinks out, and we’re fine with it. We do credit cards with rewards for the regular bills and online stuff–taking 7 people to Hawaii for free next summer with that deal, my friends.
    Kay Bruner recently posted…HurtMy Profile

  12. barbara September 30, 2012 at 10:35 am #

    Okay, maybe I’m weird. Okay, reading everyone else’s comments, I’m definitely weird. But I prefer cash. I find it easier for me. Sure, I do sometimes grab an ice cream on a hot day, but I don’t feel like I can spend everything in my purse either. And I don’t carry around hundreds of dollars in my purse. $20-$40 max. Everything else is kept in the bank, not easily accessible. I pay household bills online with Bill Pay through my bank. I use the debit from our household account for food and household supplies, but only if there is cash in the bank to back it up. And I allow in my budget about $50 a month cash for myself. I don’t feel guilty buying something for myself because I’ve planned for that. Then I don’t feel deprived or blow the budget. Cash is my best friend to keep me in line because I feel the money going out, and it registers in my brain how much and why I spent money. Where we get in trouble is with mindless spending. It’s not the cash, it’s the mindless attitude that is the problem.

    • Katrina September 30, 2012 at 11:52 am #

      I agree that is comes down to mindset. I guess for you the cash system give you a better mindset and for me it is the debit card. I also agree that it is important to budget for yourself so as to avoid too many “I deserve it” splurges. Last month, we kind of neglected to do that, which was probably part of why we got ourselves into trouble with the cash.

  13. Kara September 30, 2012 at 11:01 am #

    What finally worked for me was an app for my phone called EEBA (Easy Envelope Budgeting Aid).. they also have a website if you don’t have smart phone.. same idea as envelopes, but it’s all done electronically.. Been using it almost a year now and have not hit my overdraft once!! It’s also great ’cause hubby has it on his phone, so both of us always have up to date info on how much money we have in an envelope.

    • Katrina September 30, 2012 at 11:53 am #

      Hmmm, interesting. I will have to check into this. It sounds like a great system. Thanks!

  14. Anitajoye September 30, 2012 at 2:46 pm #

    i also prefer the debit card method. we even use our CC for larger purchases to get miles, but we pay it off every month.

  15. Rachel M September 30, 2012 at 9:32 pm #

    Love the new wine boarder! Looking good Katrina!! Also, ditto on the cash, I’m more disciplined with credit cards because I can track it better.
    Rachel M recently posted…Six Word SaturdayMy Profile

  16. Meg October 1, 2012 at 1:26 pm #

    If you feel you are “frivolous and silly”, that’s probably the number one reason it didn’t work for you. I handle cash very well. I feed my family 98% organic (and 100% local meat) and natural/organic toiletries (sans TP) for $500 a month. And honestly, with that number we are living large, lol. It works for my brain and I hate to see cash leaving my wallet where as a debit card has little consequence to me. We don’t do credit regardless and we have no debt either :)

    • Katrina October 1, 2012 at 3:59 pm #

      Meg, PLEASE send me a copy of your menu plan and grocery lists. I am desperate to make this $500 thing work. I cannot even imagine doing it with 100% organic. Where do you live? How many kids do you have? :) I’ve got to figure this out.

  17. Jan October 2, 2012 at 9:50 am #

    I feel terrible. I am 57 years young and there is just me and I spend 500 dollars or more a month. I spend most of it at the farmer’s market on meats and dairy. I do buy mostly organic and make everything from scratch. I should be spending a lot less when I read how much ya’ll are spending for a family. I take my lunch to work everyday and eat breakfast and supper at home. I seldom eat out and never eat fast food. I am going to have to rethink my budget and bring it down some. My freezer, fridge, and pantry are full. I could try eating what I have.

    Jan

    • Katrina October 2, 2012 at 3:07 pm #

      Oh dear, I never mean to make anyone feel terrible. It’s awesome that you are able to afford such great, healthy food. Don’t feel guilty if it works for you, especially if you are able to be generous with others, which is the WHOLE POINT of trying to keep our budget low. Another idea is to gift some of those healthy meals to families who might not have the ability to shop as healthfully as you do. 😉 Thanks for reading!!

  18. Jan October 2, 2012 at 7:02 pm #

    I love reading your blog! I feel like I know you in person lol. I am lucky to have enough to eat well. I feel a lot better and since I am healthy I am hoping it will keep me that way. You had a good idea. I do need to share with others. I think you do a great job.

    Jan

  19. Erin Rose November 5, 2012 at 9:58 pm #

    We feel exactly this same way!!! Cash gets me and my hub in big trouble. With our debit cards we know exactly how much we spend on money (we have an app on our phone that links every transaction so we know right there what’s in our account and what we spent our money on–super handy!). We too are blessed to not be in debt at just 21 years of age and just over 2 years of marriage with 1 child and a baby on the way! Jeepers whoda thunk we could do it?! :) Every time I see/hear people do the cash system I just blush and think well we’d go broke if we did that. Some think debit cards are evil, but it’s the credit cards that aren’t good. With debit it’s the same as using cash…It’s gone immediately. You live and learn with everything!

    • Katrina November 5, 2012 at 10:11 pm #

      That’s great that you’ve started with no debt and are staying that way. The trick is not just to live within your means, but to live UNDER them so you can be generous!! :) Thanks for reading.

  20. Heather C December 15, 2012 at 9:33 pm #

    I did not read through all the comments but wanted to say thanks for the laugh! And thanks for sharing. We do not use the cash envelope system (or much cash for that matter) and sometimes I feel guilty about that. But I would definitely be losing/forgetting/misplacing the cash. Some of us just do!

    • Katrina December 16, 2012 at 7:33 am #

      I’m sure it’s a great system for a lot of people, but I just can’t keep up with it. I’m too scattery! :)