Cash in your wallet: Keep it small, and budget for it

Published: January 29, 2020

Dave Ramsey

Dear Dave,
I’m trying very hard to get out of debt. I have my beginner emergency fund in place, and I’m living on a monthly budget. Is it OK to include a little wallet cash in my budget at this point, just in case?
Andrew

Dear Andrew,
It’s probably not going to throw you off too much in terms of getting out of debt if you budget $20 or so, just to have some cash in your wallet. I wouldn’t recommend much more than that, though. The idea of having $50, $100, or $200 in walking around money is pretty self-defeating when you’re supposedly saving, budgeting, and working hard to get out of debt.

What really matters is the amount of pocket money you allow yourself to have.

Think of it as a safety valve. Sometimes things come up in the course of day-to-day life that are just necessary, unexpected expenses — but not emergencies. Just designate a small amount of cash for it as part of your regular, monthly budget, and stick to that amount.
—Dave

Dave Ramsey has authored seven best-selling books, including “The Total Money Makeover.” The Dave Ramsey Show is heard by more than 16 million listeners each week on 600 radio stations and multiple digital platforms.