Y’all have heard my thoughts on the Dave Ramsey cash only school of thought, but as I continue to be exposed to advocates of that lifestyle, my thoughts continue to evolve. And I’ve realized something else about using only cash that makes me nervous.

Andy and I keep very close tabs on our finances. We use a program called YNAB (an acronym of You Need a Budget) to keep track of our budget, our savings, our goals, and our spending categories. YNAB is a sort of grassroots budgeting software that grew out of one man’s budget spreadsheet that he built for him and his wife. As it kept getting more and more complex, he realized how useful a tool this software could be. It’s not the simplest program around, but it has a lot of features that we’ve found to be very useful. Plus, I like its backstory!

ANYWAY, all that to say, we literally know where every penny goes because “Andy Cash” and “Laura Cash” are accounts in our budget just like “Visa” and “Bank Account” are. So if I spend $3.00 at the coffee shop, I record it as being spent out of “Laura Cash.” And I have learned that I’m notoriously bad with cash! It seems like a lot of times cashiers don’t automatically hand over a receipt when you spend cash as they do when you use a credit card and have to sign something, so unless I’m diligent about asking for one (or writing my purchase down on a napkin immediately before I forget…yep, I’ve done it!), the expenditure might slip my mind. AND THEN, I’ll come to find that YNAB says “Laura Cash” should have $22.00 when in reality I have $0 in my wallet. NO BUENO. (For the record, it’s never been that far off. But just about every month when we reconcile, I am off. And then I have to dredge my memory about where that $8.91 could have possibly gone. We often end up having to just write the small differences off, and it’s frustrating.)

If I used the cash envelope system, EVERY SINGLE PURCHASE I MADE would be with cash, and I would run into this no receipt problem much more often! I think that part of the point of using the envelopes is that you simply spend the amount in there and don’t worry about where it goes…but we like to worry about where it goes. Worrying about where our money goes is what allowed Andy the freedom to quit his job in Huntsville without knowing he had one to take its place. We were able to precisely track our expenditures for the previous 6 months and extrapolate precisely what we needed to live on for the next 6. We also were able to pinpoint areas of spending that could be cut if necessary. If we only knew vague spending categories, we would not have felt nearly as comfortable taking that leap as we did.

So I once again find myself at odds with Dave Ramsey’s cash-only suggestion. I personally feel far less responsible with cash than I do with cards, because it has a tendency to slip through my little fingers, never to be remembered again.

How do you keep track of your finances? Do you feel more comfortable spending cash or using a card?

P.S. The YNAB link above is our referral link. If you use it to purchase YNAB because I’ve convinced you that it’s awesome, you’ll get a $6 discount from that link.

P.P.S. As far as my cashflow problem goes, having the YNAB app on my iPhone has helped a lot. When I don’t get a receipt, I can record the purchase in there and it syncs to our budget file in Dropbox via the cloud. Whew! That’s a lotta technology!