Unlike most people, Sheikha M. has tried literally every budgeting method out there, including using spending tracking apps and the 50/30/20 rule, but still found herself struggling. After becoming fed up with her current financial situation, she decided to try the cash-only method, a trending strategy on social media.
With this approach, participants withdraw their entire paycheck in cash, dividing it into pre-determined envelopes for groceries, utilities, savings, and entertainment. The hope is to better control their finances and understand where their money is going by seeing it in real-life instead of digitally.
The change to cash was unprecedented for Sheikha. “I hadn’t used cash for a long time. It was very weird at first,” she said, but remarkably, her circumstances changed immediately. Realizing that part of her paycheck was now in cash motivated her like never before. “Seeing a chunk of my salary in actual cash really made me value each note. It’s so different from swiping a card or tapping my phone,” she attributed.
However, the cash-only approach had its limitations. Spending a specific amount of money on each envelope forced Sheikha to adapt to only having limited funds. For the most part, this was fine, but some unforeseen expenses combined with her less than sufficient cash supply complicated matters. Even more troublesome was the fact that some stores didn’t accept cash.
In spite of everything, Sheikha started to notice changes in her thoughts. When she started managing her finances with cash, her conscious spending increased, helping her budget.
Even though the envelope system does not suit everyone’s needs, Sheikha’s experience teaches an important lesson: managing finances begins with paying attention to your spending. If you’re looking to save money, budget, or even just motivate yourself to spend less, going all cash could be the reset that you are looking for.