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How I Shop Online With an All-Cash Christmas Budget

Guest post by Nony from A Slob Comes Clean

We pay for Christmas gifts with cash. It’s the only method we’ve found that keeps us within our budget.

You see, I’m scatterbrained. I choose to view this as an endearing quality, but also have to find ways to compensate for it. If I try to remember how much I’ve spent on a credit (or even debit) card, I’ll invariably forget something. Sometimes something big. If I write down each gift and its cost, I lose the list.

Using cash solves both of these problems, and I actually enjoy shopping this way. I start out feeling rich with an envelope full of money, and I end up feeling not-poor because I haven’t overspent.

In the age of online shopping, it can be difficult to work with cash only. A few years ago, I got the bright idea to buy a digital camera for my computers-are-for-solitaire in-laws. Family members warned me that it was a bad idea, but I was sure that if I could find one with a viewfinder, they would use it.

Turns out, there aren’t many point-and-shoot digital cameras with viewfinders. I searched and searched until I finally found one on They didn’t sell them in stores, and I had to pay online.

I went through the checkout process, figured out exactly how much it was going to cost, and drove to my local Walmart. I bought a gift card for the exact amount–using cash from my Christmas envelope!

Yes, it was a bit more effort, but it disproves the theory that you can’t shop online with cash. You just have to turn that cash into a gift card first! I’ve now done this multiple times and it’s worked well for me.

Not every online store will have a brick-and-mortar counterpart where you can buy a gift card, but you can also purchase a re-loadable Visa gift card with cash from your cash envelope. There may be a fee, but a fee that you pay in cash up front is definitely preferable to an unexpectedly high credit card bill in January.

Is it easier to pay online with a credit card? Yes.

It is much more satisfying to know that you stayed within your budget? Definitely!

By the way, my in-laws loved the camera, though I don’t think they’ve ever yet actually used it. Maybe my next post should be on how to save money by not buying people gifts they won’t use…

Nony is a full-time mom who is forever coming up with practical solutions that work for her unique, creative (but very scattered) brain. She focuses on ways to keep her home in order at A Slob Comes Clean, where she shares her personal deslobification journey with complete honesty.

photo credit

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  • Cate says:

    You can also deduce the exact amount of the item, deposit that amount into your bank account, and then order the item once the deposit processes. We do that a fair bit and it works great!

    • Holly says:

      This is what we do as well. I purchase with my debit card and then set the money aside for my next trip to the bank.

      On the other hand, you can now load your “gift cards” for Wal-mart online (this is how we do gas fill-ups). It has saved me so much time to be able to add my gas amount to the card at home instead of having to go into the store.

  • I just use paypal or my debit card.

  • Megan says:

    “you can also purchase a re-loadable Visa gift card with cash from your cash envelope. ”

    Love this idea!!!

  • Becca says:

    My children’s schools sell gift cards to many popular stores as a fundraiser. I write them a check and get a gift card for that amount, and the school gets to keep a small percent of the money.

  • This is a great idea. We do something similar for all our shopping at retail stores, actually…especially at Christmas. We live close to a Giant Eagle, which offers $.20 back in fuel if you buy gift cards there. Anyway, we’ve had umpteen free tanks of gas because of buying gift cards to shop with. It’s so great.

    • Amy says:

      we do the SAME thing!! love paying cash for gift cards AND earning free gas!!!

    • We do that too, Carrie! Last year, one of the grocery stores in our area ran a promotion for a $50 store gift card if you purchased $200 in gift cards. (And, you got credit towards a gas discount, to boot.) We were able to get free groceries for a week and use the gift cards for Christmas gifts.

  • Kathy says:

    Some of our grocery stores offer quadrupled “discount points,” toward the purchase of gasoline, if you buy gift cards there. And not only do they offer “generic” cards, they also offer specific cards, i.e., Starbucks, Walmart, Disneyland, etc. Double-good deal!

  • This is such a great idea! My daughter does not have a credit card and she will often have me purchase things for her online and she gives me cash. I am going to suggest this to my very frugal daughter for her next purchase.

    • jamie says:

      Have her get blue bird by american express. It is a prepaid credit card. Free to load. You can find it at walmart money center or online. I used to do the same thing as her.

  • Jan says:

    I personally don’t find cash-only to be a very budget-friendly option. If keeping track is your problem, there are sites such as (which I notice MSM had a swagbucks post about recently) that efficiently track your spending patterns for free. It updates what you buy on your card within hours of the transaction, classifies the type of purchase (such as food or shopping), and lets you go back day by day, month by month and see a breakdown of just what you spend money on. If you prefer personally monitoring, it’s very simple to set up an excel or even a word doc sheet to keep track. Cash on the other hand, unless you keep receipts or I suppose set aside the envelope, leaves no trace. If you lose the envelope, or if you lose or don’t receive a receipt, all record of your spending is gone and you’re left with zero back-up records.
    My biggest qualm with cash is that it essentially is a zero-benefit payment method. It doesn’t help you build your credit score, and it excludes you from extremely valuable cash rewards that most major card companies offer. While it’s not good to own many cards, I think signing up for a single, cash-rewarding card like the Chase Freedom Mastercard can more than pay-off in the end. First off, by using your card and making on-time payments you build credit, which can save you thousands on interest rates for car and house payments in the future.
    Second, cash reward programs really do add up. Chase from Oct-Dec will give you 5% cash back on any purchases you make in department stores and restaurants. This can be substantial – I’ve literally earned hundreds back this year, without any gimmicks or glitches. Don’t worry, it’s not all from my personal spending- my company relies on reimbursements for many client-related activities, and by using my card, I’m able to earn supplemental income without having to change anything. And when you have dozens of items to reimburse a week, an electronic record like is invaluable. If I used only cash, I’m positive I would’ve forgotten what I’d bought and forget to submit for reimbursement.
    Lastly, buying online in general vs. in person enables you to use free, cash-back link sites such as ebates. They run promotions, such as up to 10% on popular retailers, especially during the holiday season. Even normally you can always get 2-3% back on Target, Macy’s, and more.
    Yes, owning a card requires more self-control, but isn’t this what the MSM discipline series is about? And if you have trouble controlling your card habits, my guess is your cash habits probably won’t be any better until you literally hit 0 in the bank. Set guidelines for yourself, track your spending regularly online, and set up automatic payments. Credit card companies can’t control you if you take care of yourself. And I do believe that this is true of anything in life.

    • Cate says:

      I actually use my debit card for most things, but I must say that I love the privacy of using cash, because the bank doesn’t know where I spent it or what I spent it on. I’m usually buying totally ordinary things like groceries and books, but even so!

      • Jan says:

        That is a good point that I certainly agree with. For instance, I never use my card in bars (heard it might harm the credit score). But for mundane daily buys, I have no issue with using my card and feel the benefits make it more than worthwhile. Personal choice I guess 🙂

    • Alice says:

      I absolutely agree with you Jan; I could not have said it better myself!

    • Nicole Z. says:

      Well said!

      • Nicole Z. says:

        I meant…well said, Jan! We actually make money on our Discover card purchases, but it does take discipline. If I have cash I tend to spend it more, crazy as that sounds!

        • We too make a fair amount of money by using our Discover card – it’s great! My cash seems to disappear quickly when I do have it.

          Now, we too are also very disciplined with our credit card. If we don’t have the money in the budget (which I map out monthly on a detailed Excel spreadsheet), we DO NOT SPEND the money! We pay the balance in full every month, because, after all, it was all in our budget anyways!

    • MomofTwoPreciousGirls says:

      I guess it depends on the person. Three years ago I agreed with you 100%! Then we experienced a job loss slaving our hh income in half right when we had a nine no old and a second surprise baby on the way. We also lived in CT which has a super high cost of living. That job loss lasted 2years. We lost everything and at 32 moved with dh and two small kids, 900 miles from almost all our family to live with my mom in GA. We have sworn off credit and started following Dave Ramsey and using cash for our more discretionary spending and debit card/checking for bills (Perkstreet gives u 1-5% cash back using ur debit!) I find both dh and I HATE parting with cash. The money seemed to be never ending when we didn’t use cash. We are so much more careful and we follow the budget to the tee! Even when we have cash in the clothing envelope we both will keep wearing socks with holes bc we can’t stand spending the money! To each her own! ;0)

    • Meredith says:

      Well said. I live off credit card rewards! I am way more disciplined with a card than cash. I understand that if you use cash only, the whole, once it’s gone, it’s gone theory works for some. However, if my envelope became empty, it’s much easier for me to go to the ATM and get out 20 more bucks and spend that 20 bucks. If I need just milk at the store, I am disciplined enough to get just milk by using my card.

    • jennifer says:

      Very well said, Jan! I use my credit cards to pay bills & pay off the balance in full every month. I will also use it for extra cash back promotions at the grocery store or eating out. It is with these cash back rewards that I purchase my Christmas gifts for the year. I also use ebates when shopping online. In the last five years on ebates, I have earned $200 in cash back. I have tried cash budgeting before, but found it to be so labor intensive. With online bill pay & tracking for spending, it is so easy to stay in control of your debit/credit card spending.

  • Amanda says:

    We decided to do the same “cash only” thing this year. I also find myself a bit scatterbrained. I must say though that it’s been pretty difficult to hold off buying until we have the cash. I just don’t know if we are going to have it this year for Christmas!

    • Amanda, I understand! Last year, we finally set up a separate Christmas account and have money automatically transferred into it each month. It’s a huge relief to have a Christmas budget ready to go when gift-buying time comes around!

      • Amanda says:

        Oh I love that idea! I already have auto transfers to our regular savings. I’ll just have to figure out how much to have transferred each week

  • Sharon says:

    I also “save” for holiday shopping by putting a small amount in my Paypal account each month so I’m readyto do when Christmas hits. Not all retailers take Paypal but more and more are. Also, we use our rewards point from our debit card/ checking account to get visa cards and other gift cards and just give those as presents. All my family lives out of state so that works out for us. Oh, and whenever I have extra change (which happens when you use a cash envelope system), I take it all to my local Coinstar and can cash in for Amazon gift cards (has to be at least $5 worth) and SAVE them until Christmas time to spend on presents.

  • ThriftyGuru says:

    that’s a way but I think my way is a bit more convenient and economical. I put my budget into my savings account (hello interest!). Then I open a spreadsheet on my computer and input the “total” amount I’ve deposited. Next, I set up a column to automatically add up the items I buy and subtract them from the total (very easy to automate if you know excel, or you can just use a calculator). I use a credit card that earns points to buy each item and then I add the exact cost into the spreadsheet which in turn tells me how much I have left. When the budget is spent, I log into my bank account, transfer the exact amount that is owed from my savings to my checking and then log on to my credit card account and pay it electronically. With my method I earn interest and points and I never, ever pay any interest charges.

    • Sara says:

      That is exactly what we have been doing for years! We don’t have a problem overspending and I keep a record of what I bought each person every year and how much it was!

  • edna says:

    Paying cash for Christmas gifts and for any occasion is a great idea to stay on budget all year round.

  • Mary S. says:

    If you want to avoid paying the visa gift card fee and have a debit card there is another way. Withdraw all the cash from your checking account and put it in an envelope labeled Christmas money. Get another envelope and label it Christmas deposits. Then when you see something online and want to purchase it there take the money out of the Christmas money envelope and put it in the deposit one. You can then either go to the bank and deposit it right away or just do it the next time you are out. Then you can just use your debit card connected to the account the money will be deposited in to make the purchase. That way the money still passes through your hands but you also aren’t paying any one extra fees to spend your own money.

    • Brandy says:

      I like this idea. I would like the option to use the Ebates and not have to worry about any fees. For me, I would hope my purchase discipline would be enough to compensate for using “debit” online.

  • Sarah says:

    This year I was determined to not overspend with online shopping. I now keep an envelope on my desk by the computer. Each time I make an online purchase, I write the name of the retailer and the amount on the envelope. I then get out that amount of cash and put it in the envelope. I know that the money in that envelope is off-limits for any purpose other than depositing it in my checking account when it’s time to pay the credit card bill. It’s been working GREAT for me! I’m looking forward to no outstanding balances once Christmas is over!

  • We use Walmart debit cards for our bigger monthly budget categories like Grocery, Eating Out and Clothes. We put the allotted dollar amount of our choice onto these cards and they text us w the new balance every time we use them. Its like paying cash but convenient and can order stuff online. Again, the texting of the balance is what is so amazing.We also have an Orange account through ING that deducts a certain designated dollar amount every month that goes directly into our Christmas pot. That becomes our budget for Christmas and will be a seperate Prepaid debit card. It’s awesome!

  • Tina says:

    That is such a great idea. I was trying to figure out how to do this since it is the first year we’re doing an all cash Christmas. Thank you!

  • tammy says:

    I keep within our Christmas budget by not using credit cards. I do put it in my food account and then have to keep track of it. Not fun….but it’s only for a short time. What I’m wondering though is can’t you just figure out the online store total and deposit that exact amount into your checking account. Then use your debit card to pay online? If you figure out several at once, you would get one big total and just make one stop at the bank to deposit that exact amount. You wouldn’t have to really worry about how much you spent because you spent exactly what you put in….making it a non issue to balance. Does that make sense? Just thinking it might help people that don’t want to run store to store…and perhaps have a bank right down the road from them. 😉

  • Andrea says:

    I received a “free” $25 Visa gift card with a prescription one time. The activation fee was $5.95!

  • Stacey D. says:

    One more way to save using cash only and it avoids running to the store to buy the gift card!

    I use ABCGiftcards online to buy discounted gift cards, pay with my PayPal account and then make my online purchases!

    Still using cash but saving a bit more than you would and saving gas and time too! Hope this helps your future plans!

  • This is a great approach. Another system I have is to have a separate free checking account that is for Internet only purchases. I just get to the checkout phase and transfer the exact amount in to my Internet account from my main account or my holiday account (and it’s only when I have already budgeting the amount in the first place!) and use the debit card from that account to pay for it. This also eliminates any possible threat to your main checking account if an online retailer’s security is ever compromised. For some other great tips on how I budget for the holidays, not just Christmas, but all of them. Read my recent post here:

  • Maegen says:

    Hey, Nony, I love your blog!!

    I also love online shopping. My main issue is forgetting what I already have and getting carried away with deals.
    I now keep a list of exactly what I already have and what I’m still looking for and I have it right next to my computer.

  • Jen says:

    Even easier would be to use PayPal to deduct from your bank account.

  • dani says:

    Excellent idea to purchase a reloadable Visa gift card. The one time I attempted the envelope of cash – my scatterbrained self lost the envelope. I will definitely try this. Thanks!

  • Niki says:

    I REALLY loved this story and idea, Nony. Thank you for sharing. Brilliant!

  • BethB says:

    Has anyone had a bad experience using their debit card online? My husband is completely against this because more than once we’ve had security problems with online purchases (yes, we have security software). Just this past summer our Discover card number was stolen and hundreds of dollars was charged to Sams We found out quickly because I check the balance almost every day. The problem was resolved quickly but it scares me to use our debit card for online purchases. I know your money is insured the same way it is for a credit card but I would much rather deal with fraudalent charges on a credit card rather than having our bank account cleaned out. We have tons of email and text alerts set up in case our balance gets low but what happens if our account is compromised the same day bills go through. Huge mess. Am I over reacting to this possibility?

    I could also be jaded from the time I accidentally left my wallet at Starbucks for an hour. The barista called my bank to cancel my debit card (but none of my credit cards, oddly) and the bank didn’t notify me. Since I got my wallet back and saw no problems with our account it never occured to me this might have happened. Until a month later when I tried to use the debit card and it was denied. The bank said it was my responsibility to have called them. Never mind they let some random person report my card stolen.

    • Crystal says:

      My advice would be to either use a prepaid card or Paypal for online purchases, or to open up an online account solely for online purchases. Because, as you said, it is more of a hassle to get things fixed if your online account is compromised. We are really careful about using a debit card online (only use large, very secure sites) and try to use Paypal or gift cards as much as possible, instead. And then we watch our accounts like a hawk. 🙂

      • BethB says:

        I forgot about those prepaid cards! Those are great.

        I do have to chuckle at having a separate account for online purchases. For me that would work great but my husband is really against the whole having separate accounts for things. I think it’s just the different in how he does math. He’s also always had one paycheck whereas my income trickles in irregularly from many different sources. Ah well. Compromise, right? 🙂

      • Brandy says:

        We use PayPal when possible. I wish all sites online had PayPal as an option!

    • Rachel says:

      We actually worked with our bank (USBank) to set up a second checking account with a debit card. We can transfer money from our primary checking online to this secondary checking, and it protects us when we use the debit card number online. Then we aren’t worried about our primary card being stolen, but still have the ease of using a debit card.

  • Dineen says:

    There is also a service called eBillme that more online store fronts are using. Unlike Paypal, that maintains your banking information, you establish eBillme as a payee at YOUR bank’s online billing system and you pay them for purchases like any other electronic transfer. Your bank doesn’t know what you’ve purchased, as eBillme acts as the middleman. eBillme also has cash-back coupon rewards. It’s a way to pay cash online and protect your debit card from online purchasing.
    Swanson Vitamins is the only place I’ve used it so far, but I had earned enough in cash-back coupons to nearly cut our last order by nearly a third. When I checked my reward status, I noticed Kmart was one of the retailers using it. (Many other big brand names, but I am not a brand shopper, so I cannot recall them.)

  • Katie says:

    We live at least 20 minutes from all of the stores, so there’s a real cost in gas to get out there. To pay for our Christmas gifts with cash, we fill the gift envelope with Christmas gift money in September and then keep it with us as we’re shopping to take advantage of any great deals. We also have a “savings” envelope. When we make an online purchase, we take cash from the appropriate envelope (gifts, clothes, etc) and stick the cash in the “savings” envelope. We treat the savings envelope like our own personal ATM and take money out of it first to fund the rest of our envelopes, before we take money out of our checking account. Works for us!

  • Becky says:

    I use my EEBA (online envelope budgeting system) Christmas envelope. That way I can spend from my Christmas budget for the year with cash or my debit card. (no credit cards for this girl!)

  • Becky says:

    They’d probably end up taking the camera to Costco and printing out all the photos anyway. That’s what my in-laws do at least…

  • Becky says:

    Oh and that tripped me out at first…the commenter before me is also Becky and mentioned EEBA. I have yet run into another person that uses EEBA (my husband and I are suggesting it to others all the time though). It’s great until I get lazy and forget to enter something. I account for cash when it’s withdrawn and use the bank statement to make sure I didn’t miss anything. Been working pretty well for mixed use, as Becky stated.

  • Cat says:

    I buy gift cards at my grocery store (Price Chopper) so that I earn gas points along with them. I can usually earn 3x-4x points doing this during the holidays which earns me about .50-$1.00 off gas per transaction.

  • Allesan says:

    We buy gift cards (a lot of Amazon) from our local grocery store, with cash, and get fuel rewards. Don’t go over budget and save on gas, which is a huge expense, especially with holiday travel!

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