I am in awe of people who live on a cash only basis. There are a number of members of DA who do this and, in fact, I think most people in program did so before the advent of debit cards.
I am eternally grateful for debit cards and YNAB, as I am one of the many who find that cash mysteriously disappears, something like one of a pair of socks when you remove them from the dryer.
If I had my way, I would never use cash at all! It literally seems to burn a hole in my pocket. I know others as well who, when reconciling their numbers, inevitably find that their cash is off by a few cents to a few dollars, or more!
Some people have a category called “Lost & Found Money,” which they use to replace money that disappears. I currently have $16.85 in my Lost and Found category. And there have actually been times that I had more cash that I thought.
The Envelope System
People in program who live on a cash basis use “the envelope system.” They literally have envelopes with their categories labeled on each. They put the money for that category into the envelope. For instance, at the beginning of the month, they put $600 in an envelope labeled “Groceries.”
As the month proceeds, they use money from the envelope, writing either on the envelope or in another ledger exactly how much they took. After returning home, they replace the money in that envelope and note how much they actually spent, keeping a running tally. When the envelope is empty, they have no more money to use for that category. (I’m sure that if they need to move money from another category envelope in a pinch, they talk to their sponsor.)
Note: For me, YNAB works as virtual envelope system. And I am profoundly grateful for it!
In addition to reconciling one’s checking account, it is important to periodically ensure that the cash you have on hand is the amount you think you have.
To reconcile cash, you simply count it up periodically and keep track of it. Because cash is included as part of your category spending, it is just as important to reconcile your cash as to reconcile your bank account to maintain clarity.
For those who use YNAB, I have an account called Cash (just as I have an account called Checking Account) and it is an “on-budget” account, which means that it feeds into my categories.
While we want to have clarity, the Big Book says, “We are not saints. There is nothing like perfect adherence to these principles.” So instead of beating ourselves up for being imperfect with our cash, we acknowledge that errors can happen. So, instead of feeling cursed by cash, you can gratefully use it as an opportunity for acceptance.