I was on a mission to use a cash budgeting system for all of 2023. I did, and I will never go back as long as cash is available. There were just a few tools that I needed to make this successful. Getting started was the hardest part and maintaining it was the easiest. I want to share the how and why, this system became fool proof. This system encouraged cashiers and people I ran into everywhere, to try the same thing!
The first thing I did was got familiar with all of my expenditures and how much I was regularly spending not to include bills, subscriptions or automatic payments that left my account.
Step 1: Run An Account History Report from Your Financial Institution
The only way you really get an idea of your financial situation is to be honest about your expenses and how much you spend in each category. You will come to see that you spend on average a certain amount for variable expenses like groceries, gas or items for your children. The nice thing here is, you might quickly learn you have overdone it in one area and here is where you get inspired to create a budget for that area.
Step 2: Learn About the Journey You Are Going to Embark on and Get Motivated!
I watched a ton of content that was inspiring for me, here was one that stuck out. Knowing that you have so much more control over your finances when you know where your money is going, is empowering. That knowledge can lead to action. While I have in the past tried phone apps that do this for you, actually feeling the cash in hand and watching it leave my wallet had a more psychological impact and helped me have better control over my spending.
Step 3: Use a Planner That You Can Refer to Often to Manage Your Budget
Now a cash envelope system and budgeting go hand in hand. You can certainly budget and have no cash system in place, but in this blog, the two work together like a perfectly orchestrated symphony.
In 2023, I used The Clever Fox Planner Daily Pro: Amazon.com : Clever Fox Planner Daily PRO – 8.5 x 11″ A4 Size Daily Life Planner and Gratitude Journal to Increase Productivity, Time Management and Hit Your Goals – Undated – Lasts 3 Months (Turquoise) : Office Products
It proved to be too big for me to use on a daily basis. However, it was excellent to set me up and I found a better match for 2024.
The Notebook I chose for 2024 is the Legend Planner Deluxe: Amazon.com : Legend Planner – Deluxe Weekly & Monthly Life Planner to Hit Your Goals & Live Happier. Organizer Notebook & Productivity Journal. A5 Hardcover, Undated – Start Any Time + Stickers – White Gold : Office Products
This is a great alternative offering bullet style pages for budgeting vs. Clever Fox’s standard design. I did however, mimic what Clever Fox did as a blueprint for the bullet pages of this planner. Below is a side by side comparison of the two. *Disregard the toddler art on the Clever Fox! The Legend is much easier to carry around with me if I want to (but don’t really need to do) or stash in your standard purse. The Clever Fox is the size of a textbook, kind of clunky in my opinion.
Step 4: Get a Vision for Your Budget System
This is how I started. I started with how much I wanted to set aside or allocate to various categories in a year. Then I combined those categories into smaller ones to have a more manageable envelope system to make my use of this system less complicated. I created an easy to understand “Legend” to put next to those categories and then played with the numbers.
I have definitely matured my journaling style since this, but I made it fun and bright because this was a journey I knew I wanted to continue with. I created this list at the end of 2022. Now my husband and I both work full-time and I was just not at a point where I was like “hey lets make a joint account forever!”. I might get there one day, but after having spent all my life very independent, this is how I started. This helped me get a good idea of where I wanted my money to go on an annual and monthly basis.
Step 5: Find A Good Wallet or Envelope System
I started with the below. I transitioned to a better suited one mid-year and preferred it much more. I never used the sheets that came with this because that wasn’t something I was interested in doing. Part of developing a good habit per Atomic Habits is to “Make It Attractive”. Personally, there was nothing attractive about logging my every transaction after having already created my budget in each category. That can offer you a ton of insight, but it all depends on your “why”. This fit in my purse or diaper bag, no problem, but it wasn’t discreet and brought a lot of attention when I was out and about checking out and the register.
The below wallet is what I ended with and continue to use. This is attractive and doesn’t draw attention. It is practical and it works! It allows me to insert the same categories for tracking purposes and with the little wristlet simplifies everything with regard to taking it out of my purse or diaper bag when running into the store, etc.
Step 6: Set Up Your Budget For the Month
After I had a vision for what I wanted this to look like for a year, monthly I am intentional about sitting down and creating my budget for the following month, including my cash categories and withdrawals. With various holidays and such, it allows me to look ahead and adjust my cash categories, per the season or month ahead while still staying within my overarching cash budget. For example, when my step-daughters come for the summer, I increase my cash out for kids and groceries, and decrease something else, usually date-night and gifts.
By getting an overview of the month, I can see what my expected balance is supposed to be and where I can allocate those funds, should I remain diligent. For example, my first goal is to finish paying off a $10K loan that I opened in July 2023. I am incredibly close to it ($1K away!) and when I see the numbers, I can smell the pending success. I can motivate myself to do something like a “no spend challenge” to meet a specific goal, like the payoff of that loan. Then I snowball to get after my next debts until I make my goal of being debt free.
There are definitely some things that I budget for that my husband does not. I am the adventure planner and etc…so I set aside these funds monthly to put towards fun and adventure, whereas he might budget for plane tickets for the girls visit.
Some of the things this has done for me include, paying off debts quicker, staying within budget for groceries, children’s expenses, intentional date-night fund, and never being in a position where I didn’t have the money for the important or meaningful things. Thank God I am in this financial position to even do this! I have truly been able to really be in control of my finances with this method. There was no category I wasn’t really prepared for with this system. By starting this system at the end of 2022 and using it through 2023, I was able to get a clear idea of where I needed to cut back or increase for the year . Also, by not having allocated 100% of my funds last year, I still used my account for other purchases (namely Amazon).
Step 7: Stay Committed and Consistent
- Commit to creating your budget & cash out at the end of each month, for the following month.
- Commit to going to your financial institution when you get paid, to get said cash out.
This has really reduced my impulse buying in real life (online…not so much, working on that now that I have reflected). The way I achieve reducing my impulse spending is by getting serious about my debt freedom plan and knowing what I am working towards. We live in a consumer driven society and there are many ways to avoid that trap. A topic for another day. However, start where you are and get control of your budget, your cash and just see what difference that makes! With a toddler, a baby and working full time it won’t always be pretty or aesthetically pleasing to do this system, but don’t let that stop you.
You got this!
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