There is a common old phrase that says “cash is king” but these days that couldn’t feel further from the truth.

Basically all businesses now offer card payment at a bare minumum, copping the fees on their end in order to stay relevant in an increasingly cashless society. We pay our bills online, our rents, our monthly subscriptions and receive our wages this way. At least this would be the case for almost everyone. So, this begs the question, is there still a place for cash in our lives? If so, what does it look like/ and are there any benefits to hard currency?

Recently there has been a resurgence in debates about the relevance of cash, and one of the more interesting points to come out of this debate is that some people, young people even, are advocating for cash as an overlooked budgeting tool.

Using cash to budget

So, what is this budgeting hack? And who is doing it?

After reading an article on economics that focused on these tools, I decided to ask some of my friends if they used cash in a way that helped them budget and structure their finances. Most did not, but one or two mates mentioned that they found cash to be a really valuable way to both keep track of their finances and avoid overspending.

Basically, the principle behind utilising cash in your weekly or monthly budgeting is that it is an overlooked form of currency – one you may spend less frequently. It’s something that you have to physically have with you to pay for things, meaning you can’t just accidentally or mindlessly overspend without actually taking from your allotted funds.

You could simply take the all the money out of your bank on pay day and carry less in a wallet, but this could get you into hot water if you have an emergency and need access to money.

A simple hack to save

So, a great way of allotting your finances and making sure you spend responsibly could be to take out a certain percentage of your wage each pay day. This could be based on your weekly/fortnightly or monthly budget, making sure you have enough in your account for any debits or emergencies. The rest could then be broken up into groupings that go to certain expenses in your life. This can be done with a folder or envelopes or a sectioned wallet. But basically, you end up with easily allotted cash, which you can visibly measure. It puts further onus on you to spend responsibly instead of tapping a card, and means that you will think more considerately about the small innocuous purchases that always add up on your card.

Whilst this may seem like a lot of admin in the first place, the reality is that once you get into the swing of using cash as a budgeting tool, you may be able to spend and save more efficiently.

The feeling of having cash left after you’ve spent your allotted budget can also be more motivating to individuals than simply having money in the bank. Eventually you can transfer these into a saving account and see how much your money has grown over time. Not to mention you’ll be a favourite at your local small businesses, as they won’t have to cop the transaction fees when you buy a coffee or your lunch. So, give it a try if you like you mob. It may just wind up being a tool you keep for life.

Like every article on TomorrowMoney, this is not personal financial advice.