I’ve seen videos where people use cash for budgeting, which might work well for low-income earners who often get paid in cash and don’t have bank accounts.
However, this isn’t feasible for higher expenses like rent over $1,000 or mortgages of $5,000. Higher-income earners benefit more from bank accounts with budgeting tools.
I’ve always had employers who used direct deposits or pay cards, making cash budgeting impractical. Online banking and digital payments are more convenient and likely the future, especially with the rise of digital currencies.
Every cash budgeter I’ve encountered had a bank account. Only the variable expenses, like gas or groceries, are paid with cash; all other bills and fixed expenses, etc., are paid online. They bring a list of necessary bills, such as five twentys, four fives, etc., to the bank. This makes it possible for those who struggle with excessive spending to monitor how much they are spending and how much money is left over. It’s actually psychological. I used to be much better with cash, but these days I budget using digital envelopes (YNAB).
I don’t think your wage really matters—everyone should track their expenses. Most people who use cash budgeting, even those with lower incomes, often have bank accounts for paying bills. Cash envelopes are usually for discretionary expenses like dining out, entertainment, and beauty products. This method helps people stick to their budgets since, once the cash is gone, they can’t overspend, unlike with a debit card where impulsive spending is easier.
While cash budgeting can help low-income earners manage finances, it’s impractical for larger expenses like rent or mortgages. Higher-income earners benefit from bank accounts with budgeting tools. Direct deposits and online banking offer greater convenience and are increasingly essential with the rise of digital currencies.