We’ve reached the 2020s and people are still using a cash budget. Why? Because cash budgeting truly works. If you struggle with overspending, a credit card with bonus rewards points may not be your best option. Cash budgeting tips can come in handy if you’re looking to get a firm grip on your finances.

Cash is tangible and still provides many benefits to anyone who’s looking to keep their spending under control and avoid debt. That said, there are plenty of ways to modernize your process if you’re sticking with cash this year. Here are 5 cash budgeting tips for 2021. 

1. Choose Which Categories You Want to Use Cash For

First off, let me say that it is a little unrealistic to expect to convert all your expense categories to cash payments. Yes, you can buy groceries with cash but can you pay your rent or mortgage with cash? What about your car insurance? Perhaps you can mail money orders out each month. Still, this can be more hassle than it’s worth. 

With some expense categories, it will be easier to just keep the money in your bank account and set up auto-pay. Just choose the expense categories that you want to use cash for. 

2. Upgrade Your Wallet

When I first started trying out the cash budgeting method, I used white paper envelopes and labeled them with each expense category. Seems easy enough right? 

In today’s society, it was not super convenient. The paper envelopes would easily get crumpled in my purse or they’d get wet if I was carrying a bottle of water. The worst-case scenario was when I actually went somewhere and realized I didn’t have the correct envelope with me. 

I eventually switched to laminated envelopes for my cash budget and these were better to use. But recently, I upgraded to a cash envelope wallet which has been amazing to use. 

It’s basically a wallet that allows you to store your cards but also has several zip-up pockets for your cash budget expense categories. You can find one on Amazon or Etsy. With it, you don’t have to worry about misplacing envelopes or damaging them. 

3. Use a Budget Planner

Long gone are the days where you have to balance your checkbook. However, you still may want to balance your budget. The best way to budget with a mix of cash and digital purchases is to use a budget planner to track expenses. 

It’s easy to lose individual expense tracking sheets but a full budget planner allows you to update your budget during the month and track all your spending in one place. Plus, you can compare spending from previous months to see where you can make changes or improvements to your budget. 

4. Schedule Bank Runs and Utilize Cashback Opportunities

This is one of the best cash budgeting tips to implement. You won’t be able to effectively use a cash budget if you don’t withdraw your cash from the bank on time. Set a specific day and time to run to the bank and take out the cash you need. 

Also, limit the number of bank runs you conduct so it doesn’t become a hassle. You may want to head to the bank right after payday every other week or wait until a check clears in your account. 

Realize that if you want to skip the bank, you can also utilize cash back at the store too. Granted, you’ll only receive bills in increments of $20, this could be a quick way to stuff your cash envelopes. Then, you can just break the change as you spend money in certain categories. 

If you don’t want to use a physical planner, use a digital budget planner online. At a minimum, you can create an Excel spreadsheet to track your spending, savings, and keep up with your overall progress.

5. Manage Digital Cash Envelopes Online

This is an option if you really want to modernize the cash budgeting method. There are a few sites and apps that allow you to set up virtual cash envelopes so you can still practice this budgeting method but keep all your money in your bank account. 

Mvelopes has been around for a few years now and this app will allow you to break up your funds into digital ‘buckets’ according to your goals. It takes less than 15 minutes to set your budget up and get control of your finances. What’s nice is that the average Mvelopes user pays off $17,425 in debt when they utilize the tools offered through this program. 

To sign up and use the app and website, there is a small monthly or annual fee. But, depending on your goals, this could be well worth it.

Summary: Cash Budgeting Tips To Help You Win With Money

The cash budgeting method is a proven way to get back on track financially, pay off debt, and avoid overspending. These cash budgeting tips can help you modernize your approach so that your budget is more realistic and flexible. 

Remember, you don’t have to convert all your budget categories to cash each month. Sometimes, that doesn’t work anyway given today’s digital society. You can start slowly with just one or two. What’s most important is getting a good grip on the concept which is to help you gain more control over your money and stop overspending.

Have you ever tried using a cash budget before? Why or why not?


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