The Better Budgeting Podcast
The Better Budgeting Podcast is your go-to resource for mastering your finances without the stress. Hosted by Danielle Reese, this podcast breaks down budgeting, saving, and smart spending into simple, actionable steps. Whether you’re tackling debt, building wealth, or just looking to make your money work smarter, we’ve got expert insights, real-life success stories, and practical tips to help you take control of your financial future. Tune in and start making your budget work for you—without sacrificing the things you love!
The Better Budgeting Podcast
Cash Envelopes for Budgeting: Yay or Nay?
As we journey through my four-week endeavor into the world of cash envelope budgeting, I'll reveal how this traditional method of managing money reshaped my spending habits. The transformation from a die-hard credit card user to a cash envelope budgeter was an exciting challenge that tested my financial discipline and perception of money.
In this enlightening episode, I'll share the nitty-gritty details of how I allocated money into various envelopes, tackled the inconvenience of lugging them around, and the significant behavioral changes I observed in my spending habits. Strap in for a frank, revealing chat about my adventurous cash envelope budgeting experiment and its impact on my financial behavior. It's a misstep, chuckle, and learning-filled ride you won't want to miss!
Danielle is a money coach helping women and couples who have been trying to figure out their finances FINALLY create a clear plan so they don’t have to worry about waiting to refill their bank account the next payday.
She is the founder of The Financial Freedom Society on Facebook and her signature money coaching program, The Better Budgeting Playbook. You can sign up for her newsletter by clicking here.
Take the first step towards financial freedom and sign up for a complimentary assessment call with me, Danielle Reese.
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You can connect with her on Facebook or Instagram.
Hello and welcome to the Better Budgeting Podcast. I'm your host, danielle Reese. I am a money coach and I am the founder of the Better Budgeting Playbook. It is a one-on-one coaching program for women and couples who have been trying to figure out their finances, finally created a clear plan so they don't have to wait on payday anymore and stop living paycheck to paycheck. If that's something that you need help with, I take on clients. I actually had a meeting last week where someone was like I was listening to your podcast and you said you took clients. So here I am because I need help. So yeah, I do take clients.
Speaker 1:You can check out the Better Budgeting Playbook in the show notes. Click on the link there. It'll take you to the page that has an application. Filled with the application, we'll have a quick 30-minute session just to talk about where you are, where you want to be, with your finances, and we'll talk about coaching as well. Also, we have the Financial Freedom Society over on Facebook. If you aren't part of that, it's a great place for a lot of free resources. We talk about budgeting and saving and paying off debt and money mindset, because that's a really big portion of it. So go check that out as well. Their link is in the show notes. Also, if you've been listening for a bit, go ahead and give me a 5-star review. That really helps the algorithm of this podcast. I don't know if you know this, but if you search Budgeting and Apple Podcast, I'm going to show up with Dave Ramsey. I'm fighting for a spot with this man, so go ahead, leave a review, leave 5 stars. It's greatly appreciated.
Speaker 1:Today's topic is all about using cash cash monies. For the last four weeks, I've been using an experiment. Your girl is strictly a credit card user, a responsible credit card user at that Got out of credit card debt and I learned how to use them responsibly. But I kept seeing cash stuffing like envelopes on TikTok, on Instagram, on Facebook Reels, and I got intrigued by it and I was like, okay, I don't have the fancy pretty nails to make all the ASMR sounds, but I can definitely put some cash in an envelope and see what behavior changes am I going to have and see if I spend more money, if I spend less money. If it's an inconvenience, what is it? So I'm going to share with you my personal experience with using cash the last four weeks, as somebody who has been using credit cards as a form of payment for years. Now, before you come at me of saying, danielle, credit cards are debt like. Why are you teaching people how to do that? Or you're teaching people how to do other things and you're doing something completely opposite. Listen, I've learned about my behaviors with money and I know for a fact that I can use credit cards responsibly. I will swipe that card and then, as soon as it posts, I will pay it, and sometimes I wait a whole week because my spending plan goes week to week for me and I'll just pay it all at one week. But it took years for me to get to that point and understanding where can I do that and when can't I do that, because, y'all, I will put a vacation to the Bahamas on a credit card in a hot second if it came down to it. But I know that the result and the outcome of that is going to be awful, so I don't.
Speaker 1:Let's start off with talking about the materials that you need to do this system. You need cash and you need envelopes or anything that's going to hold money an accordion binder, a wallet, however you want to manage it. Me, I just did some simple letter envelopes. I like that very much because I just stuff them in my purse, and my purse is smaller. It's like body size, bag thing, I don't know, it's just it's smaller, it's not huge. Okay, I put my keys in it, my glasses and like a small wallet and that's about all I can afford to fit in there. And then I was stuffing these damn envelopes in there and these envelopes got all crinkly and messy and all the things. So that's the one con that I didn't like with this experiment was having to carry around all these damn envelopes Like this is a super annoying and super inconvenient.
Speaker 1:I only used envelopes for a couple of categories. I used it for groceries and household items, kids, chiropractor fuel and then eating out. I had three envelopes the very first week and I didn't have any money that I was putting into eating out or household items. I just used groceries that past week and I was like I really don't want to put two more freaking envelopes into my purse, so I just added them into the envelope that was with my groceries, my eating out and my household items. I added it into my groceries, which made it super messy later on, just so you know.
Speaker 1:So if I was going to do this and continue this, which I probably will, because there are a lot of great attributes to cash, but for right now we're weighing the pros and cons. I'm going to change the way that I'm holding the cash. I will probably get smaller envelopes and even that, maybe not even envelopes like paper envelopes. I would probably get something more on the plastic side, maybe a binder, accordion style, something that's small wallet size to get into my purse, because the freaking envelopes are all frayed, ripped apart, like it's just a mess.
Speaker 1:At this point, after four weeks of using them and I told you that I had multiple different categories for these envelopes and I noticed that there was just things that I didn't need to put money into an envelope for, like in my chiropractor office I know what it is every time I go I could have left that money in my account because it doesn't fluctuate, like it's 33 42 every time I go. Okay, leave the money in my account and then I'll just go ahead and use it when I need to go to the chiropractors office. I used cash and it was super inconvenient because I had to lug that thing around and I guess I could have left it at home. But for the sake of the experiment I was learning, right, I didn't know if I was going to need it on the fly or not. And then also what if I went to the chiropractors office and I forgot that dang envelope.
Speaker 1:The next segment for using cash and cash envelopes is the time commitment that comes with it. So for myself and also all of my clients, in the better budgeting playbook we use a spending plan and it tells you where money needs to go, for which account and where, and all the things for every single paycheck you get paid two times a month. You know exactly how much is going into the grocery budget. You know exactly how much is going into the car fund All of it by paycheck. So if you don't have that done, it's going to make it really difficult to understand what do I need cash for and what don't I need cash for. So if you are listening to this and you don't have a budget and we call that a spending plan over here in the better budgeting playbook you need to get one. So go, click the link in the show notes sign up for a meeting with me so we can get you on a spending plan.
Speaker 1:But then comes the fact that once you get your spending plan all set up, you need to decide what items are going to be cash and which items are not going to be cash. So I already told you that chiropractor I don't need that to be cash anymore. I'm going to leave that stuff in my account. But groceries eating out those things are definitely something that I will consider continuing with cash. They're variables, right, like there's no set amount that you're going to spend every single month, nor how much you are going to spend every single week. So some weeks you're going to need more fuel than others, some weeks you're going to need more food than others. It just really depends. So I would definitely continue this habit with those two categories, maybe even household items and definitely eating out. But you have to decide what those things are, and that might take a little bit of time and a little bit of frustration.
Speaker 1:The next obstacle that I ran into was my banking restrictions, so my ATM only allowed me to pull out $500 a day, and when I got paid one week, I had a lot of things that we were going to be paying for that we had planned for some back to school items, which was a big ticket price for us that week some baseball stuff, like a lot of things that we had planned for throughout the month that we were going to pull out that week to take care of haircuts, all the things for back to school, and I needed like $544. So when I went to the ATM, it only let me take out 500. And I was like, okay, well, I'll just put my card back in and see if I can pull the other $44 because I need it, right? No, no, there's only a limit of $500 a day. So I didn't know that. Now I know that and I can plan my spending plan around that. But that was super inconvenient.
Speaker 1:So here was what happened that day. I'm sitting there and I'm counting this money and I'm trying to put it into all of its envelopes. I got $500 and $44 less, and every single envelope needs something different. And I'm like, okay, this is a struggle because guess what? They gave me all 20s. They didn't give me a single five or 10 or a $1 bill. Like, I got all 20s and my grocery budget needs 170 and my household item needs 78 and my fuel needs 53. And I'm like, shit, how do I do this? All the other mamas out there are going to side with me on this. If we don't need to get our kids out of the car and there's a drive-through for anything, we are doing it right.
Speaker 1:I could have went into that bank and asked for change, but I'm not getting my kids out of the damn car. It's just not happening. It is a five-minute thing to get them out of the car. A five-minute thing to get them in the car Like it's just not happening. So the cash resulted in me being frustrated because I didn't have their correct change. And then I had to make the decision okay, do I go in the bank or not go in the bank? I'm not going in the bank because it's just a whole other hassle.
Speaker 1:So that day we were going to go get my son's haircut and I was like okay, so haircuts was $50. I got $60 or $40. I knew that my haircut wasn't going to be that much Like it's a little boy's haircut. It wasn't going to be $60. So I took $40 in, ended up paying like $25 all together. So then I come out and I have my envelope and I'm like trying to count out and divide out all this money, right, Because now I got change and I'm like, okay, I got changed, I can do this all right. And y'all, I forgot that the ATM couldn't give me the extra $44. I literally spent 10 minutes sitting in my car with my kids asking if we can go yet, because the math was not math and for this girl I completely forgot that I could only take out $500. And I'm trying to add all this stuff up and I'm like this bank shorted me money, that ATM shorted me money. I can't believe it. I even said it to my son and he was like, well, let's go back. And I was like I ain't going back there, it's just thinking back on it now. It was such a freaking chaos moment and definitely an inconvenience that if I would have just wiped my card like we would have moved on with the day. But no, we did not move on with the day. We sat there until I was blue in the face trying to figure it out and then finally remembered oh yeah, I didn't get $44 out.
Speaker 1:The next thing is tracking For cash envelopes. If you have your spending plan done correctly and everything has a place and you get a zero base budget, you don't need to track anything because everything has a place right, and especially when you pull out the cash. You don't need to track anything because you know that you're only allowed to spend $200 for groceries. That's what's in the spending plan and that's what's in your envelope. For the sake of the experiment, I did track on the envelope so when I would spend something, I put the receipt in there and then I would write it on the envelope. I would also write on there the amount I deposited every week, because it was different every week. The only reason that I would continue that is if I didn't have an envelope for every single thing. For instance, I mixed groceries, eating out and household items because in my budget line I keep those things separate For you and your household. Hell, you might buy everything at Walmart and you just have a Walmart envelope and that's cool. That works for you.
Speaker 1:I wanted to keep it separate. I've kept it separate for years. So when I mixed them all into one envelope and I started tracking, it got really confusing really fast. So one thing I would do differently is I would either have an envelope for every single category and not track, or I would throw them all together and not track at all. The other thing that I noticed is I spent so much less money. So much less money. When I use my spending plan and I have $200 for groceries, I go to the grocery store and I know I got a limit of $200. So I stay within that. I get close to that $200 mark every week. That's what it is.
Speaker 1:I noticed when I was using cash and I would go to the grocery store I was much more picky and choosy and reserved about picking up odds and ends that weren't on my list. I would say that I used probably only 70% of the money that was in my grocery fund every single week. So 30% every single week I didn't use and it would roll over and roll over. So at the end of the month I had a bunch of money that was left in the grocery envelope that now I get to make a decision of what to do with it. So I just threw it into savings and I was like, okay, well, you know whatever, I didn't expect to have such an abundance left over. So I didn't have a plan for the extras. And now it's like, oh, I need to decide. What am I going to do with extra? If I have extra, am I going to throw it into another envelope? Am I going to put it into savings? Am I going to put it towards a goal of something? I don't know, but it never even crossed my mind until it actually happened.
Speaker 1:Something else I did not enjoy whatsoever was carrying around cash, like that day I pulled out $500. I'm walking around with $500 in my purse Not that I've ever been mugged or know anybody that's been mugged, and only seen it on the TV but it's a real thing and I'm just like this is really uncomfortable for me to have this much cash on myself. It's super uncomfortable and when I was sitting in a parking lot counting out 20s $500 worth of 20s I was like I hope nobody pulls up beside me and sees me counting all this cash like I'm some kind of mama drug dealer over here. It was super, super uncomfortable for me and I I don't know why, I have no idea. When I grew up, my dad always had cash. I barely ever seen my dad swipe a credit card, a debit card, anything. It was always cash, and I'm like this is so scary for me. So that's something that I need to get over, because I would say the amount of money that I saved and not spent during this exercise was wonderful, like it was great. I can definitely see myself reaching to cut more out of the cash in order to save more in the long run.
Speaker 1:Another thing was the behavior change and I talked a little bit about that in the groceries that I was just a little bit more reserved on how I would spend cash and there were times when I would have to pull money out of one envelope into the other just to cover some unexpected expense that you know I didn't think of. Like we needed to buy mouse traps because we have a mouse in our house and I was out of household money but I had grocery money, so I just pulled it out of there. So if you're cool with being a little bit flexible, you could totally do that. And there are people out there that are like, nope, we're living with this dang mouse until we fill our household envelope again, and that's cool too, that's fine. That's just that's not my style. Like if I've got the money over here in groceries and I don't need groceries for the rest of the week, I'm just gonna go buy the mouse traps.
Speaker 1:I also noticed that my husband was very more reserved and picky and choosy when he went to the grocery store with us and he even said to me Danielle, I think you should put in the budget a line for Bryant snacks and then you give me the cash and I'll just go and I'll buy all my snacks that I like for work. And I was like, wow, who are you? You look so fancy and cute today. Thank you so much for saying that. You know like that was attractive, honey. Yeah, I'm all about it For you being independent and buying your own damn snacks and also putting a line in the budget for it. Like who are you, sweetheart, you know? So for September, he's got his own little budget line for Bryant snacks on there.
Speaker 1:There's definitely a behavior change when it comes to using cash. For me. Specifically, I will say that I have talked with clients that will tell me if I have cash, I'm spending it like it's just it's gone, it's gone, it's gone, it's gone. So maybe the cash envelopes isn't going to work for you, and that's okay. There's other methods out there that you can use and implement. We work through that in the better budgeting playbook. But if you are consistently overspending in categories that are variables, such as groceries and household items and kids and Just odds and ends, that is variable spending. I would encourage you to try cash for 30 days. I didn't see a huge change in week one, week two, but when I had things actually happening later in the month with the back to school and everything, that's when I saw the big change of behavior when it came to using cash. So if you try it out, Send me a message in the show notes. You can connect with me on instagram or facebook. Send me a message, tell me how it is.
Speaker 1:I love talking with my listeners. It's so great. We are at 48 states right now on this podcast and I am like searching for you in Alaska and I'm searching for you in Hawaii. So if you know anybody that is listeners over there, please send it their way so we can have them listen. So I can mark them off on my little paper over here that I hit all 50 states with this podcast and I know how selfish and self-absorbed that sounds, but like I feel like that's pretty cool and pretty awesome. So I just want to mark it off with that. Thanks so much for listening this week. I really appreciate it. Again. Leave a review, if you would five stars and a little comment there. It's so helpful for us and we'll talk soon. Bye, bye.