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Do You Need to Force Yourself to be Cash Poor to Stay on Track?

Like most things in life, I truly believe that the basics of personal finance is a combination of mental toughness and knowing yourself.  I know I need barriers between me and cash; this is the very reason I can’t carry cash on me.  Talk about a weird feeling when I have debit card $3.33 from McDonalds (don’t judge me, who doesn’t love the dollar menu?).

It is also the reason that I have to make myself feel poor in an effort to save money.  This leads to what people may perceive as a complicated cash flow, but I think it is pretty simple and could possibly help a few people!

Checks Come in From Day Jobs – My CASH FLOW

This starts it all off! The Wife and I have separate checking accounts where our checks are deposited.  We each have a set amount that goes to our joint checking and joint savings.

The joint checking is where most of our bills are paid from.  I say most because I pick up a few extra bills since I make a little bit more.

Our joint savings is done at ING; we have a few ‘buckets’ in our ING Account for different things (home down payment, vacation fund, wedding present fund, etc.).  Each week money goes from our individual checking to our joint savings.

I Love My ING Account

I Love my ING Savings Account.  Why? One main reason for me:

  • It doesn’t feel like it is mine

For whatever reason, when it goes into our joint ING savings it no longer feels like it is mine.  It is not an emergency fund, it is a down payment fund – if I need to touch it, sh!t has hit the fan.  The Wife feels the same way which is huge.  ING currently has a promotion for new customers (they give you $25 bucks for depositing $250…what up 10%! – Contact me for details).

So How Do I Make Myself Feel Poor?

So what does this all have to do with feeling poor?  I have to Keep my main, single checking Account in a constant state of Flux with very little in it or I feel flush with cash and it is ok to go nutty.  While I am not budgeting, per se, I always have to know that I have less than a grand or two in the account or I will feel like it is not a huge deal to go spring for a round of MaCallan 18s.

Is my system crazy? What do you employ? Am I just an idiot for needing to save myself from…myself?



  1. I have a similar system. I never have over $1000 in my checking account. I am paid weekly, so I just divy up the paycheck by week for bills, food and savings. I agree that seeing a low number in my checking account keeps me from going too crazy at a store. And, like you, I never even think about my savings account as touchable in any way. Mainly because withdrawal is so inconvenient, which is great!

  2. I am the same. We budget down to zero – and I keep a $100 buffer (although have instant access to a few thousand should I need it.

    I had a phase where I let money build in my account and had a buffer of about 300, but now I’m used to keeping it lean. After all, it ain’t earning interest in my checking account.

    • There are interest bearing checking accounts out there…regardless $100 is VERY lean and would scare the hell out of me

  3. My thoughts exactly.

    I just used this same reasoning on why I pay extra on my that I can feel poor and spend less.

    I also had about 50 failed attempts at my e-fund until I bought savings bonds with a 5 year early withdrawal penalty.

    I just opened an ING account, but knowing myself, this would still be too liquid for me.

    I don’t carry cash either. I can blow through it like nobody’s business. That combined with my bad memory, I have a hard time tracing my purchases with cash.

    • A savings bond for an efund huh? I literally have never heard of that…I’d love more info on how you do it up

      • When I started buying savings bonds, I-bonds were making about 4.5% (not the case now). I did an automatic payroll deduction through work. You choose the bond denomination you want to buy. Once a month bonds get issued, so if you are only doing $50 at a time, then you probably will get bonds every month.

        It’s kind of like doing a CD ladder. However, if you’re lucky enough not to tap it and you have children that eventually will go to college, the bonds could qualify for a tax break come college time.

        The key to this working was only deducting a small amount from our pay over a long period of time, so you don’t miss the money. I think it took us 5 years before we had a good chunk of change.

  4. Hm. It’s an interesting question. It ties in to another question I’ve been brooding over: whence Bag Lady Syndrome? It could be that we subconsciously convince ourselves we’re poor so that we don’t diddle away the money we do have. Do that long enough, and over time you accrue a surprising amount of unspent money.

    I also have the same issue with cash. It flows through my fingers like water, and at the end of the day I don’t even know where it went! Also, while I’ll enter the amounts of credit-card receipts in an Excel spreadsheet–so that I can keep a grip on how much of the credit-card budget has been spent–but I’ll be darned if I’m going to fiddle around with every cash receipt, too. Cash money feels like easy-come, easy-go stuff. A credit card charge feels like impending doom.

  5. I am sort of the same. I tend to pay all my bills 2x a month (and will drain the account down) so I know I have paid everything. And there is very little left over.

    And I love ING too. I have a camp fund, current savings goal, car maintenance, and one for my Lending Club repayment. That money to me isn’t really there. It is just put away. The amazing thing….before I had those accounts, I thought we didn’t have the money in the budget to save for them.

    The wonders of separate piles!

  6. I do (sorta) the same thing. I’f I ever have over a grand in my checking for a prolonged period of time, I’m doing something wrong. I could use AT LEAST $600 of that $1000 to pay down debt, I can easily live off of $400 for two weeks until I get paid again. Meanwhile the extra $600, instead of just sitting there, has just paid down some debt! Do that 26 times a year, and you’ve got $15,600 in debt paid off!

  7. I don’t have to make myself feel poor but I do think setting a certain amount of money available for cash (or “credit” card – that is paid off each month) can work well. I can pretty easily fit my purchases into what I have available. If I want something more I can save up for a little while and when I have the money buy it. Making sure long term savings, retirement… are taken out before you have money available to spend is very useful.

    • “Making sure long term savings, retirement… are taken out before you have money available to spend is very useful.”

      I am also in that automation camp

  8. I’m the same way with cash. Never carry any on me.

    I love automation. Too bad a couple of my utilities are still in the dark ages and don’t allow autopay. We basically use Ramit’s automation system, I just wrote about it last week on my website. It’s great in that we pay ourselves first – 401(k) and savings come out before it hits our checking. We’re pretty frugal though, so I don’t really have temptation to spend anymore, except on a lunch out or a coffee here and there.

  9. @Evan – The wife and I use the same system but with inverted deposits. We start with the joint account and move the money over to individual accounts on a weekly (me) and bi-weekly (her) basis. We started budgeting like this years ago and it’s been very, very successful. It’s not so much about feeling broke as it is to placing an artificial limit on spending that at least ‘looks’ real.

    Once you get rid of the noise of recurring payments (mortgage, gas, electric, water, cable, etc.), it’s a great deal easier to manage a budget.

    @SandyL – Love I bonds for the emergency fund. They are a near perfect instrument for cash reserves as the goal is to keep money safe, keep it where you won’t spend it, and to get a yield that keeps pace with inflation – check, check, and check.

  10. We also use a zero-based budget. EVERYTHING is allocated, even if it’s only to a targeted savings account (of which, I have several). Paycheck comes in, transfers go out, nothing but maybe $20 left for snacks at work. 😛 We spend very little this way.


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