Post # 1
DH and I have lived together for 3 years now splitting finances. For some reason we prefer not to use a bank. We both have checking accounts, but usually keep them pretty much empty. Each paycheck we divid up our money into envelopes. rent envelope, bill envelope, grocery envelope, etc. It has just seemed easier this way to us and prevents us from over-spending. Any time we tell someone this they always give us a funny look. I guess not using debit cards all the time and being early-mid twenties is just rare?
Post # 3
- Wedding: March 2012 - Pelican Grand Beach Resort
This is probably pretty rare these days. I’d be nervous about this because you are probably building absolutely zero credit so you could have amazing personal finance skills and be living debt free and be unable to borrow for a home or car or get credit in an emergency. Also, if you lose your money–if it’s stolen, you have a fire, etc.–it’s gone. Your deposits aren’t insured because you aren’t making deposits.
Post # 4
Are you both paid in cash? We get paid directly by bank deposit, and to me it would make no sense to take it all out of the bank to split into envelopes that could be lost/stolen/damaged etc. And ditto what mrsSonthebeach: is saying about credit ratings.
Post # 5
I guess it’s rare, and you should do whatever works for you. It’s interesting that you and your DH have the same habits!
Personally I think putting the money in banks does have some benefits…you get to earn measly interest but it’s better than nothing. I also use my debit card for online purchases and emergencies because I don’t always have enough cash with me.
I wouldn’t want to keep my cash in the house because I’m not a diligent person who would do my own accounts. Internet banking makes it easy to track transactions and bank balances. In an unlikely event of burglary, all your cash might be gone too.
Post # 6
Our paychecks come directly to our bank account, and my FI has all of our bills set up to directly come out every month. And I don’t have to do anything! haha.
I can see the advantage of using cash, but I see more disadvantages (lost money, if it gets stolen it is gone, ect. )
Post # 7
My husband & I did this when we first moved in together. It was our first time on our own (I was 18 & he was 20) so it was all new to us then. Shortly after though we opened a bank account together.
We did the same thing you do now though. Different pile for each – rent, groceries, ect. Though now its less of a hassle with it in the bank. We never over spend either. I just make sure to manage it correctly.
Also it was a hassle if we ever needed anything you would have to have a debit or credit card to pay with. Now we pay everything online (electric bill, tv bill, phone/internet bill) rather than have to go mail it out each month.
I also didn’t like having to carry around all of our cash.
EDIT: Thought I would also add, we only did that for a little while. We got our bank account ASAP because carrying our cash around wasn’t safe. If it was lost, it was lost!
Post # 8
Yea I would not do this. Besides the not-building-credit thing, and the fact that it doesn’t sound like you’re saving much money? This just seems more difficult because who accepts payments in cash? I couldn’t pay my mortgage in cash, nor any of my bills. So if I refused to use a checking account I guess I’d have to get a money order, which I’d have to pay for, for it would cost money. Plus the danger of losing money by having all that cash around. If I lose a credit card I cancel it and I didn’t really lose anything at all. If I lose a wallet with $300 in it I just lost $300. So yea… not a fan of a cash system.
Post # 9
You should though set up a savings account to put extra cash flow in for just in case, of say your cash gets stolen, or you have a fire.
Post # 10
@CorgiTales: Yes, my thoughts exactly! It was SCARY carrying around our cash!
I promise OP its much easier with it in the bank.
Post # 11
We can’t pay our bills in cash, so there goes that option . We wouldn’t do this anyway, since we have direct deposit, we make online purchases, and we have savings (which we won’t keep under the mattress!).
Post # 12
@peachykd: People have been doing that for a long time. I actually don’t see anything wrong with it and think it is a good idea. It is easier to keep track of money when it is cash. Sounds like you have an account if you need it, likely with a debit card (booking a hotel), so I don’t see the problem. If it works for you, it works. When we needed to budget, we did the cash envelope approach and it really helped us get on track.
Post # 13
I’m surprised you’re able to get away with this because I know a lot of bills these days can’t be paid in cash. My landlord won’t even accept cash for rent, I have to write a check, and forget about trying to pay cable, electric, cell phone, etc, with cash. It’s so much easier to pay online with a credit card or by connecting directly to my account.
I’d have some of the same concerns as PPs. How are you building credit? How are you saving money? What happens if you lose the envelopes or they get stolen? You won’t have insurance on cash.
Personally, I’d consider at least opening one joint account and putting a portion of both of your paychecks into it. Paying bills will be easier, you won’t have to worry about losing your money, and you can collect interest if you start a savings account.
Post # 15
Having all our money in cash in our house with no real safeguards like that would scare the shit out of me.
It was bad enough having wedding money here for a few days!
Plus I can see it being a huge problem should you ever need to take out a loan or get a mortgage.
Post # 16
My husband works and uses a checking account, and I’m a SAHW so I just get cash every week for whatever we need. I’m horrible with any kind of card, so it’s better for me to stick with cash.
If it works for you, great! But, you do need credit too for future purchases like a home.