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?

Kids and Money

 “Too many people spend money they don't have..to buy things they don't want..to impress people that they don't like.”
― Will Rogers

Yesterday I guest posted at Toys in the Dryer. I wrote about kids, chores, and allowance.

Today’s post is a continuation of that post. Have you read that post yet? It's my first ever guest post! You really should go read it. Go ahead. I'll wait.

Oh good! You're back. 

We have kids. Our kids do chores. Our kids get allowance. Now what do we do with that money to help them learn how to handle money correctly?

I can tell you how we do it at our house. Our system has been in place for about a year now and is working pretty well. Getting the system down and working out the kinks was a hassle. I’m hoping that by sharing our ideas with you, we will be able to save you some hassle on your end.

Each week, our boys receive half their age in cash. For example, our 9 year old gets $4.50 a week for his allowance. That amount may sound high, but stay with me. There’s a method to the madness.

The deal behind the allowance is that we no longer buy the boys much besides clothes and food.  Our boys are now responsible for paying for life’s extras – gifts for birthday parties they attend, souvenirs from vacation, new Lego sets, and Halloween costumes. I also require gifts for each member of our family for birthdays and Christmas. 

When it’s allowance time (usually on a Sunday afternoon every three or four weeks), I grab a cup of coffee and meet with the boys one at a time. They each own a plastic coupon organizer that we use to help them budget. The boys have envelopes in their organizer labeled for the various things they are responsible for. I hand them their cash and then help them divvy it up among the envelopes.

The first envelope we fill is their giving envelope. Each boy puts 10% into an envelope to take to church on Sunday. They are learning how to give!

Then we work on the other envelopes. Right now, they are working on saving up for Christmas presents for the family, Halloween costumes, and a birthday gift for Son1 (he’ll be 11 in November). Any money above and beyond these categories can go into their spending envelope.

When it comes to spending, we give them latitude. We have final say on what they are allowed to buy, but if they want to spend all their money at the concession stand at a baseball game, we will let them. When they realize that they are broke and have nothing to show for it, they will spend better next time.

We’ve seen the three of them pool their money to get a big ticket item (usually a mega-cool Lego set). The negotiating that goes into that is good practice for them.

Allow me to highlight a side benefit to them having their own spending money. When we go shopping, I don't have to say no anymore when they ask for this toy or that game. I can say, "Sounds like a great idea! Is it on your list? Do you have enough spending money?" Then they have to say yes or no to the purchase - not me! I don't have to be the bad guy who always says no! And our shopping trips are much more pleasant.

We do have one major spending rule – no spontaneous shopping. Each purchase must be planned out. We have the boys write down what they want to buy and how much it costs. Then they have to wait at least three days. If they still want it, and if they have enough money, we will take them shopping to get that thing they want. I tell them that I don’t walk into Target without a list and a budget amount in mind, so they won’t either. Forcing them to plan has really saved them from some foolish choices and teaches them how to save towards a goal.

Each of our boys has a different money personality. We have a spender, a saver, and a giver. We work at fostering their strengths and training away the weaknesses (Hmmm – that sounds familiar. Lots of talk about strengths and weaknesses on this blog lately).

How do you handle allowance at your house? How are you teaching your kids about money? 



Linking up with Coffee Friday, and Calm My Crazy.

I'm Guest Posting Today!

I'm so excited to be guest posting at Toys In The Dryer today! I'm talking kids, chores, and allowance and how those three things go together.

Toys in the Dryer is a fantastic blog full of wonderful recipes, craft ideas, and encouragement for moms. It also has a special place in my heart for giving me this opportunity. Go check out my post, leave a brilliant comment, and then explore all the wonderful articles on their blog.