Friday, October 19, 2012

Cash Is Saving My Sanity

“Live like no one else so later you can live like no one else.”
 - Dave Ramsey
Yesterday, I took the boys shopping for their Halloween costumes. We really had a good time. They had been saving their allowance knowing it was up to them to buy their costumes. They all had enough money for the costumes they wanted, and we came home victorious. They are going to be a Ninja, General Grievous (Star Wars), and Batman. It was a successful day.

I loved not having to pay for their costumes myself. When they are spending their hard-earned money, they spend it more carefully. They tend to make better choices at the store.

That works for DH and me too. We budget our money into envelopes each month just like our kids do.

On the first day of each month, I go to the bank and get the cash for all the expenses of the month. Utilities and gas for the cars are handled separately, but all other expenses (food, clothes, haircuts, etc) are handled with cash that is budgeted before the month starts.

I know I'm not the first person to talk about using cash. I know I'm not the first person to talk about using envelopes. But maybe our story will put a new spin on it for you.

I'm a spender. I love to shop. I like to buy things for me and things for others. Since DH has a nice job, it's not a big deal if I buy a few things here or there. But I realized that I was walking into Target for two things and walking out having spent over $100! What did I just do?

So DH and I had a long talk. I told him that I needed to be more disciplined with our money. We had goals we wanted to meet, and I knew my spending wasn't going to help us meet those goals.

We went to a strictly debit card system. That helped some. But when the account ran low, I just transferred in more. I wasn't completely out of control, but I didn't take the budget seriously.

Since the debit card thing wasn't working, we decided to switch to cash. Only cash! On the first of the month, I take out the cash from the bank. I come straight home and put it into envelopes based on the needs of the month (every month is different). Every dollar goes into an envelope with a purpose. Then those envelopes determine how we spend our month (pun intended).

I take the envelopes with me when I go out. I pay with cash at the grocery store. Let me tell you, it's a real pain! I use the calculator on my phone and subtract as I go so I don't get up to the front without enough money. I use cash in Target too. Those may be some really cute shoes, but if the clothing envelope is empty, those cute shoes are going to stay at Target.

And it's working!! We are meeting our goals and controlling our spending! I'm so proud at the end of the month when I haven't gone over our budget. There isn't usually a dollar left, but knowing that we met our goals for the month (and I that helped) is so exciting.

If you are working toward a financial goal or just want to control your spending a little bit better, I highly recommend that you try to go all cash for a few months. The first few months are the hardest. Remembering to take your envelopes with you when you go out is tricky. And knowing how much to put in each envelope takes trial and error. But I promise you that it works!

Maybe you are reading this and think I'm crazy. That's ok. Maybe you think cash is too complicated and you're happy with your plastic. That's fine. But I challenge you to try it. Go all cash for three months. See if you spend less. I'd love to hear how it works for you!

What do you think? How do you pay for stuff at your house? Have you tried all cash? Did it work for you?


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