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6 Reasons People Argue Against Using Cash Envelopes — And Why I Don’t Buy Them


Guest post by Kristen from Getting More God

After following MoneySavingMom.com for a while and reading about the Cash Envelope System, my husband and I decided to take the plunge about a year ago. Our bank account was slowly dwindling, even though we had a budget that we tracked each dollar in. We figured being “cash only” was the best way to keep track of where these dollars were disappearing to.

I thought it would be painful, but it has actually been beautiful. We will never, ever go back!

Many of my friends and family think we are crazy for using envelopes and offer up the same concerns I had before taking the envelope plunge. I figured it would be quick and easy to get them all in one place and provide the answers I’ve found since beginning our “Life with Envelopes.”

Argument #1: “I don’t want to have all those restrictions! I want to enjoy my life!”

You determine the restrictions. You look at your income versus your bills and decide exactly how much money goes to each category.

If you love to shop and want to spend $100 per month on clothes, so be it! That just means a little less is going to go to the other envelopes. It all depends on your decisions for where your money goes based on what your family needs and can afford.

Envelopes actually free you. You know things are covered and you no longer have such regret over purchases you weren’t prepared for!

Argument #2 – “I don’t know how much money to put into each envelope or what envelopes I even need!”

There are many great resources available with guides on just how to do this.

Argument #3 – “I do not want to go into the gas station every single week to pay cash for my gas. Headache!”

There are still things that we use our card for, and gas is definitely one of those. I would never ask you (or require myself!) to go inside and pay for gas every time. You’re right, it’s a headache!

Argument #4 – “I don’t want to have to tell my friends I can’t hang out because I just spent my last dollar in my envelope. I’m not an 8-year-old with an allowance!”

No, you’re not. But you could be a 35-year-old living at home with your parents if you don’t learn to manage your money well! So, my advice is to look at your month when it starts. Knowing how much money you have for eating out, entertainment, etc. and then decide which weekends you will use it.

If your friends ask to hang out on a certain weekend where you know you’ll be strapped for cash, recommend another weekend or ask if you can hang out at a certain venue you know you can afford. You initiate the invites and then things are much more within your control. And if you find that you are constantly restricted by your envelope, you may need to adjust amounts.

Argument #5 – “That seems annoying to have to actually go into the bank and get cash out every month. I don’t have time for that.”

I say this when it comes to exercise, too… You have the same 24 hours in your day that everyone else has. You make time for the things that matter to you.

Look at what you spend your time doing. You can’t deny that those are the things that matter to you, or else you wouldn’t occupy yourself with them. So decide to make your financial health matter to you and get to the bank once a month! It’ll take 10 minutes! Financial responsibility requires some dedication and maturity.

Argument #6 – “I don’t want to use cash because I use and pay off my credit card each month. I get points/rewards for my purchases and I love that!”

If you are able to keep your finances 100% in check and not have money slipping through your fingers with that system, then more power to you! I’m not saying everyone must do the envelope system, or else you don’t care about stewarding your money well.

I’m simply asking that everyone consider it. Handing someone cold, hard cash is so much more difficult and meaningful than swiping a card and “giving” them this imaginary-feeling money. It doesn’t leave an impression at all. You can easily spend without even thinking about it.

You think twice — or even three times — when you hand someone your hard-earned cash. That’s the benefit. But if your “cushion” isn’t dwindling slowly and you are fine with your system, no need to change!

Ultimately, do what works for your family. Using cash envelopes has completely changed our family (for the better!). They might not work for you, but you’ll never know until you try. Thank you to Money Saving Mom® for introducing this to us.

Kristen is 27-year-old mother of one happy toddler and wife of one great man. She has many earthly passions which she attempts to use to stir her affections for Christ on her blog, GettingMoreGod.blogspot.com. She hopes to see His hand in all of the passions He’s given her here on Earth. She wants everything to point back to Him. That’s the challenge, and she writes about the process of discovering it! 

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  1. says

    One thing I haven’t noticed anyone remarking on is the simplicity of working with cash. We started using cash envelopes for “groceries” and “gas” just last month. I balance our checkbook and on-line bank account, and immediately noticed how much fewer transactions I had to record, and how much less room for error there was. The month of May only took up a half-page in my checkbook instead of two pages.

    Something else we did in our first “cash” month was we dumped all of our spare change into a jar to sponsor kids going to a Christian summer camp. Our money is always tight, so it was fun to watch the change grow in the jar and know that money would help the kids we love!

    • K* says

      I tought it was so much harder to use envelopes than credit cards! I like mint.com and seeing what I’ve spent on certain things.

  2. says

    I was one of those people who loved my credit card especially the rewards. We always paid our bill in full and some months we were even able to save a couple of hundred dollars so I never thought to change our budget system. We decided to start a cash system as a trial for one year in January to see if it really impacted our budget and 5 months in it totally has.

    In the past, there were so many times I would run to CVS or Target for one or two things and end up with a cart of stuff that I charged. Now I still go to these stores, but i am much more aware of what’s in my cart, and typically I come in way under on the bill than the cash I have on me. By switching to cash we are saving steadily every single month!

  3. Deesselisa says

    I don’t even buy the one for gas. I don’t see how long it takes to go in and pay for gas or why that is a pain. But this is. We don’t have a credit card. We once did, it doesn’t work for us at all, so now they are long gone. We do have a debit card we don’t often use. But we were going on vacation and didn’t want to carry so much cash in the envelope for the hotel and food etc. So we deposited the cash savings vacation fund. We filled up with gas and drove off to our destination. The gas pump had been modified by thieves so they could steal my debit card number. While we were driving, they racked up transactions in Dubai and South America somewhere. So the bank shut off my debit card. I didn’t need to buy anything until dinner time at which point it was too late to call and find out why it was denied. I had to write a check. I found out the next morning what was wrong. As it was a debit card, not credit, we could not even get our money back until we got home and filled out paper work at our bank and wait for it to be reviewed. We luckily had a small amount of cash from our other envelopes (we even had to borrow from the kids to have gas money to drive home with.) But we had a hard time explaining to the hotel which doesn’t usually take checks, why that was all we could give them. Not a fun experience. Lesson learned: Take the Cash! And Pay with it at the Pump! Everytime!

    • jen says

      wow! that is a terrible experience you had to go through. i never heard of that happening at gas pumps till now.

    • Jennifer Ott says

      I understand…but what did you do with small kids? I can’t leave all 4 in the car (hubby is deployed sometimes so I can’t go without them) in their carseats! And in the winter (we live in a cold climate), we remove jackets in the van to securely fasten their buckles, so it would be a huge hassle… Having done lots of international traveling, we always call our debit card company ahead of time to let them know about our plans and unusual spending that might be showing up.

      • Brooke says

        Yes, with small children going inside and waiting in line to pay for gas would be the ultimate time waster. Also we get our gas at Costco which here is much cheaper but only takes a debit or Amex, not cash. I wouldn’t pay more for gas just to use cash somewhere else! Unlike groceries or Target trips, I get the same amount of gas every week. So we still use a debit card for that one.

        But I loved this article because I’ve heard all the excuses and used them all at times too, but since we switched to cash we are saving $1,000 a month more than we were previously!

      • Ashley M says

        We went to the cash envelope system almost a year ago and the gas envelope was always such a hassle. I didn’t mind paying the station attendant, but my husband hated the inconvenience. We get gas through our grocery store (a Kroger affiliate), so I got a reloadable gift card. It works for groceries and gas. Now, I just take what we budget for gas with me to the store and load the gift card while I check out with groceries. It’s a win-win. We are still using cash and my hubby can pay at the pump with a gift card. Problem solved.

        • Rhonda says

          We do the same thing with Walmart gift cards. We save 3¢/gallon & at some times during the year it is more. It’s not a huge savings, but that way I don’t have to use my debit card at the pump or go in & pay cash.

    • says

      If your bank didn’t catch that unusual activity and contact you immediately, then I think you need a new bank! Ideally, the bank or credit card company should be monitoring accounts for suspicious/abnormal activity.

      I’ve had a debit card # stolen once and we had our credit card # hacked once and both times, the bank or credit card co. froze our accounts and contacted us immediately. We had a new card within days!

    • Kristen says

      Horrible! My debit card got stolen years ago and was a hassle to work with the bank. My credit card got stolen four times this year. The difference was the credit card called me immediately all four times, but I had to call the bank. I had less than 100 charged on the credit card, but the debit card theives wiped out my bank account in minutes. I will never use my debit card. I cut them as soon as the bank gives me a new one as the old expires.

  4. says

    When I was a single person, I managed my money just fine using credit cards. But when I got married to a man from another country who’d never had a credit card….. I soon learned that I made a HUGE mistake thinking he’d have the same credit card usage as I did. Switching to cash was definitely a great decision for us that eliminated a lot of frustration on both of our parts (well, at least mine).

  5. jen says

    i used the envelope system when i was in high school and had my very first job and bills. i divided my bills in 4 and then saved that much each week when i cashed my check. i kept the envelopes in my dresser and then took cash to pay the bills when they were due.

    now we don’t use the envelope system. we mostly use a credit card for all transactions in a month. in the last 2½ years, i have earned over $1,300 in cash from my credit card.

    i do use a money market for all of our big expenses. by “big” i mean property taxes / heating oil /christmas /all insurances. i divide these bills by 12 and transfer the $ monthly into our money market. i like having minimal bills to pay montlhy. i don’t like paying fees to pay bills monthly like insurance companies tack on. i keep track of how much is in our “escrow” account by using an account in microsoft money. we only have one money market account at the bank, but in our microsoft money escrow account we have 3 accounts. 1. escrow 2. car (i pretend we have a car payment now so when i need/want a car i can hopefully pay cash) 3. emergency reserves. my dh thinks my system is crazy, but he appreciates that i pay all the bills and we don’t have any debt but our mortgage. i realize this way takes a lot of upfront cash and would be difficult for some. since i started my adult life this way, it’s just what i know.

    i wish everyone luck on this journey of managing money!

  6. Audrey says

    I desperately want the envelope system to work for me. But I am so absent-minded. In the last few months, I have lost $450 when envelopes have gone missing. Not very frugal, plus it caused a big argument between me and my husband. :( As much as I want to use the envelope system, it does not work for me.

    • Erin says

      I’m with you, and I have the same problem with coupons. I keep them in an envelope but often by the time I get to the checkout stand some are missing (managing two toddlers through the store along with the groceries doesn’t help). Even though the envelope system sounds great (and is obviously working wonders for many out there!), it would be too risky for me to lose the money.

      I’m better off to just make a list and write the amount I have to spend on my credit card for the week. If I get to the register and the price is more than I planned, I ask the cashier to take something off so that the amount is under my budget. And I won’t complain about getting $50 transferred strait to my savings account every time those spent budgeted dollars add up.

  7. Holly says

    I use a modified version of this system just because I LOVE my credit card points/cashback rewards. I do budget $X in the gas, me, entertainment, groceries, other house……categories weekly or monthly.

    If/when I do pay by credit card I come home and move the actual cash to an envelope marked Charges. Then when the bill comes in I have the REAL cash to pay it off and I stay within my budget.

    • jo says

      I do that too!!! And it’s worth the several hundred we get back each year from American Express. I usually pay on the CC several times a month. I do a bank transfer to the CC and use the cash to “pay” ourselves our weekly food/allowance etc. instead of going to the bank.

  8. Kelly says

    So I have not read 100% of the comments, but I have noticed the lack of debit card discussion. More just credits cards that are paid off each month or cash. We rarely ever use cash for anything and we never use traditional credit cards, but we budget as if we had cash envelopes. We use our debit card for everything. When we make a purchase with our debit card we choose credit and sign, it still deducts directly from our chekcing, however anytime we choose credit with a debit card purchase we get the reward points. There is nothing to pay off at the end of the month. We still figure out a budget for each category, gas, grocery, clothing, dining out, entertainment, vacation, household inprovements, etc. At the beginning of each month with sit down with a spreadsheet, enter our checking account balance, track our income and our bills and put into each budget category how much we have to spend for that month. When we shop, we scan our receipts with an app called Lemon. Each week we balance the spreadsheet using our online banking and the receipts from purchases. I always know exactly how much is left in the grocery budget when I go shopping. Once the funds are depleted there is no more swiping of the card. The only place we may allow an overage is gas, because we have to get to work!
    There are many benefits to doing things this way:
    No theft of cash
    Still get rewards points
    Purchases are protected
    Unauthorized purchases are protected!
    No credit card bill to pay off each month
    We still live to our budget amounts and can easily track everything we purchase through our online banking statements and our scanned receipts.
    Just wanted to put this out there as there are other options than just cash or paying off your credit cards!

  9. Jen says


    For people that really have a hard time giving up the cards and carrying cash (I am definately one of them!) I just found an app for Iphone and Android called “Easy Envelopes”. You can enter the amts you want to put in your different envelopes on the app and when you make purchases log them under the appropriate envelope on your phone and you can track your spending in each category through virtual envelopes. I just downloaded it so I haven’t tried it yet but looking forward to testing it out!!!

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