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Cash Only Living - Page 2

post #21 of 48

Your post rocks. Our system is very similar and I also find it works very well. I totally believe that people spend more money when they write checks, use debit or credit cards. With envelopes it very tangilbe and when it's gone it's gone. While in theory the charging everything to get the bonus on your credit card it a good idea, but I think in reality it encourages people to spend more after all it is a marketing tool to get you to spend more.

In the current system that we use in our household we still occassionally charge things or use paypal. I often purchase my gas via cc so that I can pay at the pump and don't have the hassle of removing to kids from their carseats, walking inside, and putting eveybody back in the car in subfreezing weather. In these cases we remove $ from the envelope and put them in another envelope labeled with name of the next month (i.e. April) This money helps fund the next months cash and also helps us to recognize that the money is spent.
post #22 of 48


We have a mortgage--a whopper. Just over $3K/month including taxes and insurance--but we also live in the NYC 'burbs. The mortgage comes out of the main checking account.

If you're saving for a house, set a budget and then stick to it by limiting your access to the money. So if you have direct deposit and you've determined that you should be able to save $200/paycheck--have the direct deposit split so that $200 is deposited to your savings account (or better yet--an ING account that has better interest) and the remainder into your bill paying account. Don't touch it unless there's an emergency. You'll be stunned how much food is lurking in your house when you're out of money!
post #23 of 48
I encountered the same problem with pennies turning into dollars of spending when I carried cash. Somehow, it's easier to not spend 1 or 2 dollars when I have to use a debit card. On the other hand, dh and I need to start taking out cash for groceries again, that's our biggest area of overspending. I think mostly because we've been bad about planning out meals so we end up wanting to have some of everything just in case and that's just not a good idea.
post #24 of 48
Sapphire chan... when you overspent with cash, did you actually have the cash separated out into envelopes--or somehow otherwise segregated by budget category? And if cash didn't work for you before, why would it work for your groceries?
post #25 of 48
We are pretty much cash only. Both dh and I blew our credit all to heck, and so it was just this past year we were even allowed to open a bank account, and that's because dh went back into the military. We have no credit cards, haven't for, oh, five years now. We do have debit cards on our checking account, but they carry no line of credit, even though they have the mastercard logo on it. That only means you can use it in place of a mastercard where they're accepted. This is nice for us, we can finally purchase things online...before that, we had prepaid debit cards. Kinda the same concept as gift cards, you refill it when it's all gone. Other than that, the checkbook just stays at home, and I pay bills online directly out of my checking acct.

When we didn't have an acct, we'd use the envelope method, though that didn't always work with dh. It did help for him to see how him just blindly spending directly affected how much we had to eat on, or play on, etc.
post #26 of 48

Electronic envelope system

For those of you like the idea of using envelope budgeting, but want the convenience of using your debit/credit cards, online banking/billpaying, etc., there is an online service you can use. Hopefully it is okay for me to mention it here - if not, you can e-mail me at kgwill at gmail dot com for more information.

It is called Mvelopes and you can find out more at www.mvelopes.com. Basically, it is your grandma's old envelope budgeting system, but you can do everything online/electronically. Once you get everything set up, the service goes out daily and grabs your spending activity from your bank, your credit card, what have you, and gathers it into one place. You set up the envelopes you want to budget for (as few or many as you like), and then drag the transactions into the appropriate envelope. For example, groceries go into the Food envelope, and gas goes into the Transportation envelope. Or, you can have Food:Eating Out and Food:Groceries...however simple or complicated you want to get. You can also split transactions in case you go to the grocery store and also get household items or clothing or something.

When you set up your envelopes, you also set up a spending plan based on your actual income, and you use your income to "fund" those envelopes. It is like virtually cashing your check and dividing it into envelopes. When you drag a transaction into the same envelope, it subtracts that amount from the funding, and lets you know how much you have left to spend in that envelope.

The best part is how it handles credit cards. When the transaction comes in, the software/service knows the transaction was charged on your card. When you drag the transaction into the appropriate envelope, it debits that amount from the envelope, so you know how much you have left to spend, and then it transfers that amount into a "money for credit card A" envelope to sit until you pay your bill. You never have to worry about having enough cash on hand to pay off your bill.

They offer a 30 day free trial. I'm about 20 days into it and I am so hooked! DH and I were pretty good about not spending more than he makes, and we always paid off our credit cards, but we weren't saving much at all, and we didn't have a lot to show for all the money we spent. Already this month I've "saved" close to $800 of our tax return that otherwise would have been frittered away $100 at a time. It is going to our "saving for a car" envelope. =)

Well, this has gotten really long and I sound like an infomercial, but I really do have to rave about this service. The only drawback for me is that it is actually an online service - not software like Quicken or Money. You pay a monthly fee of about $10, so you are always paying for the service, but not owning anything. It seems steep to me, but judging by the money I've saved already, it is going to more than pay for itself in must a month or two. And like I said, they have a 30 day free trial, so no problems if you want to try it and decide it's not for you. But if you do try it, do yourself a favor and stick with it through the initial adjustment. It can be really weird to get used to (especially if you are used to Quicken), but they have really good tech support and they can walk you through all kinds of problems.

Just a thought if you have a little bit of extra cash to spend on the service and you think you might do well using the envelope system. I'm going to try it for a quarter (the smallest increment of service you can pay for at once), and then experiment with just maintaining the system myself for a couple of months. Not sure that will be possible, but I'd like to try, if it means saving $120 a year.

post #27 of 48
Krista, that sounds interesting, but for $10 a month, I'll just continue my system of writing down in a notebook how much I spend on my card in each category.
post #28 of 48
Yeah... $10/month is kinda steep.

But it doesn't matter. Cash in the hand is there or it's not there. A debit card doesn't have that impact.

Thanks, though... I will absolutely refer that out!
post #29 of 48
I think it works differently for different people. For us, cash doesn't work nearly as well as using our debit card, but then we're VERY strict about sticking to our budget. We have $0 in credit card debt and $0 in overdrafts. If we go over our grocery budget this week, then we deduct that amount from next week's budget. And we stick to that.

That online envelope system sounds fabulous! I might try it out for the 30 day free trial.
post #30 of 48


Yep, different strokes for different folks. We operate like you Sammjm - no overdrafts and a strict spending plan. If we happen to go over in one envelope, it has to be pulled from another. So, it works just like cash on hand to us, but then we also have a very long history of keeping track of ALL debit and credit receipts. I know some people would rather/do a better job keeping track of cash.

Call me a nerd - I like having a computer program for everything. I even track my fertility on the computer. I forgot to add - if you want to just buy a similar software, I know it's out there. It just doesn't update as easily. If you go to www.crown.org (Crown Financial Ministries), I think they have a similar type of software - though they might be migrating away since they are now supporting Mvelopes.

I agree that $10 is steep. However, using this service finally got my family onto an envelope budgeting system that we can stick to, so I can't really knock it too much. In just 3 weeks we've saved (or rather, not spent ) more than the $120 it would cost for an annual membership. We've also seen how we really can't afford the car we wanted to buy, so we're making do until we can. That is a big deal!

I am loving the cash only system! Though being at the end of the month as we are, we are skimping a bit in places 'cause we went over in some categories due to not having the spending plan going at the beginning of the month. I'm still keeping to our budget though, since I can see all those "saving for" envelopes increasing, even if just by a couple of dollars. And it's a great lesson for DH and I to see how much higher those balances would have been if we hadn't gone to the grocery store w/o a list just once and ate out those two times when we were lazy and didn't want to cook. =)

post #31 of 48
I've been considering going from cash only for groceries and household to cash only for everything. I'm just curious how you would go about paying your utilities and rent and what-not. Do you driving around everywhere looking for pay stations or do you go purchase money orders?
post #32 of 48
Sarah... our bill money gets put in the checking account and is paid online. We only have cash in envelopes for things we would've used the debit card for.
post #33 of 48
Originally Posted by heatherdeg
Sarah... our bill money gets put in the checking account and is paid online. We only have cash in envelopes for things we would've used the debit card for.
This is what we do! It's awesome!
post #34 of 48

Going back to cash/envelopes....

We started out using cash for groceries, household exp, gas, etc but then went back to using our debit cards. Now we are going to go back to cash because withe the debit card it's just too easy to spend too much money.

We do have some higher balances on credit cards so we're going to take the change that we get when we use cash and accumulate that. Then every two weeks, we'll deposit it back into our checking account and use that to pay down our credit card balance or any other debit. We've been accumulating some change for a few weeks now and it's amazing how quickly it adds up! :0)
post #35 of 48
we use only cash...we dont even have a checking or savings account. we use a budget for all the bills and spending and track all our spending in a notebook that i have with me at all times. hubby and i have an allowence for each week and that is for whatever we want, b/c everything from emergancy milk runs to gas in worked into our budget. we find that we dont overspend when we can see everything written out on paper.
post #36 of 48
we have a checking account but only put in money for bills. the money is directly withdrawn. we keep three emergancy checks (sometimes you can only pay a bill with a check- for example, parking ticket )

otherwise it is cash only. I have a prepaid credit card for stuff requiring a card and for convienience but it cuts me off if I don't have enough (unlike my check card which has a $5000 line of credit attatched to it). As in if I am one cent over I am denied.

My dh uses credit for the business but for home stuff its cash on teh barrel. we have a lto of debt to get out og and the first step is not getting into debt any more. for us that included the overdraft line on credit on our checking account. it was just too easy to dip into that.
post #37 of 48
We kinda do cash only....all of our bills are paid online through the checking account. Each week we take out our "budget" and that money has to cover everything that isn't a bill....food, gas, toiletries, etc. We are swimming in bills : so our budget isn't too big, so normally it just goes to the essentials and each week I can buy one or two things that we have been needing but aren't essentials. So, we don't have an envelope system, I think that would be too restricting for us. Once we went to spending cash only (not saying here's how much we have for the week, use the debit card) we are really able to stick to the budget...once the cash is gone, it's gone. Lately I have been putting aside some of it at the beginning of the week and making do with less in order to build up a little emergency fund, since we are SO strapped that we have NO safety net

We have been trying to buy nothing (there are a couple of posts here about that) this month, and we were doing GREAT till dh's sandals broke and he needed new ones (we live in TX, and wearing anything but sandals in the summer is insane, IMHO ) but he got new ones for about $11, so that's good shopping and I am a good nag so I can easily tell him, no those are not for wearing to work, put them away, don't do this, etc so he keeps them nice a little longer. I swear, dh is like a child. But, he's doing so much better at actually respecting his stuff! Maybe that's because he isn't allowed to get anything unless I approve it (sounds sad, I know...but I really DON'T control him and MAYBE one day we will be out of debt )
post #38 of 48
Just recently I've started a small home business for the purpose of raising funds to contribute to the opening and operating of a local Buddhist/yoga center.

But I had quite the quandry about sales (for both businesses) - take credit cards or cash-only. I finally decided I'd like to opt for cash or check only as a business person because I don't even want to participate helping people borrow money they don't really NEED to borrow.

Does that sound weird? I mean, I know it's the customer's choice, but I don't think many people are even aware they have a choice. I would feel awful if someone bought something on credit I even suspected they couldn't really afford at the time.
post #39 of 48
see the problem is all of my fun money (anything above my grocery money) is on a prepaid credit card (tied into my paypal account) and ocaisionally, like if I don't get to the bank to withdraw, I do have to use the check card. I generally am in the habit of not shopping at cash only stores just because I can't always shop there.

before we went to mostly cash only, we only used plastic. it was never credit but plastic all the same. I never carried cash. so I never shoppped at stores that didn't. I assumed it was because they were too cheap to cough up the 3% and wasn't willing to shop at a place who didn't want my business bad enough to accept my money if it came by way of plastic.

I understand your delima though. we offer same as cash fin ancing at our store. it feels so icky ut not only have our sales gone up about 60%-75% but when people are approved for the line of credit thier initial purchase also goes up considerably. it is the reason we can live debt free now but it still feels realy icky. (for the record we do not hold the debt. we are hooked up through a bank somewhere and they transfer the money to us instantly.)
post #40 of 48
Yeah, rabbithorns!!! I LOVE that you are helping raise money for a Buddhist temple/yoga center!! That's both noble and COOL!

I think you ought to say something about WHY you are not taking cc's b/c I think you are on to something by NOT taking them. You could do it really respectfully and say something about how you want to help people get out of and stay out of debt. If you do this, I would love to hear how you phrase it.
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