If you’re operating from a cash budget in key spending categories, chances are you go to the bank each pay period and withdraw a certain number of 20’s, 10’s, 5’s, and 1’s. Then you distribute the bills to envelopes or your wallet sections based on your pre-determined budget amounts. From then until the next pay period, you spend accordingly but don’t necessarily track where each bill or coin goes.
Image courtesy of FreeDigitalPhotos.net
This method works fine for many people. They don’t see a need to worry themselves over the destination of each cent as long as it’s been taken from the correct envelope. But there are occasions when specific tracking is advantageous.
For instance, let’s say I’m finding that my grocery budget is running out several days before payday. By tracking my specific cash expenditures, it might be easier to discover where that category is hemorrhaging. I may examine it at the end of the month and find that I’ve been shopping more frequently at grocery stores where prices are higher or that I’ve been making a lot of “emergency” trips to the closest store because I’m not planning meals ahead of time. Seeing those trends can help me adjust my habits and stretch the grocery budget.
Or imagine that your entertainment envelope is getting depleted really quickly and you’re not exactly sure why, but you suspect it may have to do with the Starbucks drive-through window on your way to work. In this case, you may just want to track a subcategory. Rather than recording every cent spent on entertainment, just keep a list of what you spend on coffee. If at the end of the month you find that $30 of your $50 entertainment budget was spent on Caramel Macchiatos, then you have your culprit.
Tracking each dollar can also be really helpful when you’re revamping your budget, because it gives you a realistic view of exactly where you’re spending and what adjustments you can make.
In the photo above is a printable spending log that fits perfectly inside the sections of my cash envelope system wallets but could also be kept inside a paper envelope. You can find it in my Etsy shop.
To learn more about budgeting, visit Melissa’s blog www.atimeforeverything.net.
Tags: budgeting, contributor
31 days challenge, Blog, Budget, budgeting, contributors, March 2013 Posted in
41 comments
41 comments on “Cash Budgeting: Do I really need to track every dollar?”
Thank you. Love your logs. Downloaded them to use in my envelopes!
You’re welcome!
This printable is great! I just started the cash system for the first time and was struggling writing everything down on the outside of my envelope. I was struggling with how to keep track of my money. Thank you!
You’re welcome! I’m glad it will come in handy. 🙂
Debt free living is something that I want so badly in my life. I’m going to try the cash envelope system!
You won’t regret it, Robyn! All the best to you!
Thank you for the Cash Spending Logs, I have just started using the envelope system. This will help me and our family establish a budget, and to stop wasting money and time.
You’re welcome, Yvonne! I hope you find it helpful.
Thank you!!!
You’re welcome!
Thanks! I am going to download my copy now.
I have one of Melissa’s wallets-I love it! Helps me say on track with budgeting. Plus, it is super cute 🙂
You’re welcome. I’m glad you like your wallet. 🙂
Please don’t laugh! While I enjoyed this article and will be printing and using your worksheet (thank you!) what truly caught my eye was the zipper pouch in the image with your cash log. Is that yours and if so, where did you get it?! My biggest clutter issue is my purse and the random receipts that I toss in it. It becomes a huge mess at the end of the week and I could see this helping me tremendously!! 🙂
Amy, you can find that zippered wallet with dividers in my Etsy shop: https://www.etsy.com/shop/ATime4Everything. 🙂
Yes she sells those absolutely awesome envelopes in her etsy shop!!! I have one with a black chevron fabric! It is so beautiful and matches my purse perfectly! http://www.etsy.com/shop/ATime4Everything?ref=si_shop
Thanks, Lindsay. I’m so glad you like yours! 🙂
Love, love, love these!! And thank you for being so generous to allow us to DL them for free this week 🙂
You’re welcome, Shelly!
Thank you! I desperately need these as I keep feeling like I either have no idea how much I am truly spending each trip to the grocery store, or someone is pilfering $20 bills from my wallet….and I can’t honestly say I believe it’s the latter of the two! 😉
Heehee, Leigh–I think we’ve all been there at some point. 🙂 I hope they help you!
Awesome,trhank you!
You’re welcome!
Looks likes the pouches can be found on the author’s blog:
http://www.atimeforeverything.net/
Thank you!
Question for anyone who does this: I’m a stay at home mom. My husband works and gets a base pay but the most is on commission. It changes dramatically month to month. HOW do I do a budget with that?
Thanks!!!!
Andria, this is a really great article addressing variable income: http://www.youneedabudget.com/blog/2011/slaying-the-variable-income-dragon/ (It’s on the YNAB blog and so ties in with the software, but the principles are the same even if you don’t use that for budgeting.) I think you’ll find it helpful!
Now that it appears my husband and I will be indefinitely working with variable income, I’m going to follow these same steps so that we get to the point where we’re using the previous month’s income to pay for the next month’s expenses.
Love the wallet and the free download forms. Thanks for sharing!
You’re welcome, Linda!
Thank you so much! I use the wallet from A Time 4 Everything, and I felt too disorganized without knowing where the $ went and how much. I tried index cards, but they covered the labels. These are much nicer, and fit perfectly!!
Michelle, I’m so glad to hear this addition will help your wallet function more smoothly for your needs! Makes me happy. 🙂
Thank you!! Perfect timing – I was just trying to create my own!! lol!!
Yours are perfect!
You’re welcome, Denall! I’m glad I was able to save you the time!
Thanks so much! We are just starting with cash budgeting and this will help us so much.
You’re so welcome! Glad to help. 🙂
Thanks!!!!!!!!!!! love it, I´m sure it will help me a lot.
You’re welcome, Christine! I hope it does.
When I tried to print, my computer said the pdf file would harm my pc. Has anyone else received this message?
Christy, did it say it would harm your PC or that it could? It’s probably a standard warning from your antivirus software so that you don’t accidentally download something that you’re not sure can be trusted. But if you’re concerned, send me your email address (to melissa at atimeforeverything dot net) and I will send you the file directly. 🙂
I think that analysis is SO important but you definitely can’t do it without details. Love the spending log. Very practical.
Thanks! This will really help.
I just ordered my Cash Wallet and card holder and can’t wait to get it!! Thanks so much!