Try a Cash Budget to Save Money & Do Your Happy Dance!

How can a cash budget save you money?

We are all reliant on paying for most things with plastic. But if you think back a few years… most of us used cash or wrote a cheque!

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The Importance of a Cash Budget in 2019

A cash budget is what it says on the tin… you pay for everything with cash rather than a card. Obviously, larger sums such as rent or mortgage will still be better paid through your bank. But for the purposes of this method… you will pay for everything with good old fashioned cash and coins.

You can buy ready made envelopes to help you allocate your cash for groceries, bills, entertainment, travel to work etc or some people find a folder easier to manage like these.

It is relatively easy to organise a cash budget every month but there are lots of benefits.


If you are struggling with money maybe you could try a cash budget and weigh up the pros and cons for yourself?

You may decide to give a cash budget a try for a month or so just to see if your lifestyle suits. I have to say it works once you get your head around using cash for everything… and counting out change!

Take a look at this in-depth article to explain how to plan your cash budget regime.

A Cash Budget – Deliberate Thinking!

A cash budget makes you think more deliberately about what and where you are spending your money. Once you have your cash sum in your pocket, going shopping becomes more exciting… weirdly!

You know you only have a finite amount you can carry with you, so your buying becomes more considered and deliberate. It’s easy to overspend when you can use a card…

With cash you can see how your cash is diminishing in your pocket and it’s a big wake up call!

It’s nice going shopping for the day with your credit card.. as a reward or you fool yourself into thinking you can afford to pay it back at the end of the month.

How often have you paid your credit card bill off completely at the end of the month?

Your credit limit may also be much higher than you can afford.. obviously, this is deliberate as the credit card companies make more money on balances remaining and carried over.

So stick your credit card in the freezer in a waterproof bag… hide it under the frozen peas you never use at the bottom of the freezer… hopefully you will forget it’s there!

A Cash Budget Can Help You Save For Retirement

If you are on a cash budget, One of your envelopes can have cash allocated for your retirement if you are still working.

Always make sure you pay yourself first! With a cash budget, this is easier than you may think. Plus you will know how much money you will definitely have to save each month.

Paying yourself first with a cash budget means you will not just save in dribs and drabs with whatever money you have left at the end of the month. This way, you know exactly where you are with your money and what you have left to spend.

Paying yourself first forces you to save!

A Cash Budget Means Less Impulse Buying!

If you have a weakness for impulse buying the cash budget will discipline your wayward impulses for good. If you don’t have the money… you will walk past that shiny thing that has caught your eye.

A cash budget also helps to keep your home clutter-free. No more impulse buys = no more clutter of half-wanted items.

Your Wants and Needs?

A cash budget will very quickly sort your wants and needs out. No longer will you be at the mercy of your wants. From now on… only buy what you need. It’s very freeing!

You don’t have conversations with yourself when in the shop… no more justifying a frivolous purchase just because you tell yourself ‘it will be fine… I will pay for it at the end of the month’.

That ‘pay at the end of the month’ never comes… but the credit card bill turns up like clockwork!

Maybe for the first time in your life.. you will feel in control of your spending. With a cash budget, you have to carefully and meticulously plan out everything you need to buy. You may find you have extra money you never knew you had!

The Psychological Impact of a Cash Budget

This may sound dramatic but a cash budget can have a huge impact on your psychological health. Not only will you feel in control, but you will not use spending as a way to ‘make yourself feel better’ cheer yourself up or compensate for a shitty day!

Studies have shown that spending money causes actual pain!

If this is the case.. reduce your pain, anxiety and increase your self-esteem by getting in control of your finances with a cash budget!