Limit Overspending with Cash
My husband and I try our best to use a cash envelope system to manage our grocery, dining, household, clothing, auto, and personal care budgets. When we use it, it works.
This week I had $120 in cash to spend – $40 to buy groceries to last us four days, $40 for a Costco trip, and $40 to buy some kids furniture that I wanted from Craigslist.
When I went to the grocery store I only took $40 in cash with me. Knowing that I could only spend that amount made me think about what we really needed and what could feed us for a couple of days. When I went through the check out line I was ready to overcome embarrassment and put a few items back if I was over budget. The total rang up to $34! It is such a good feeling to come in under budget. $40 for about 10 meals is do-able, but you have to fight the pizza temptation when you are faced with a mound of dishes to climb!
When I went into Costco I had $40 and a random $1.50 in cash in my purse. I had my list and my phone calculator ready. I really had to write down what each item cost and calculate the best buy for my money. It took extra time, but it was worth it. My total was $40.23. I am ashamed to admit that I spent forty bucks on paper products, only to be used and thrown away. At least the quantity will last us six months and the paper will biodegrade fast in the landfill.
I saw a table and set of 4 chairs on Craigslist that I had wanted to buy from Ikea. Buying the four chairs and table from Ikea new would have cost me $95 plus tax and gas. I bought the same items second hand and barely used for $40. Awesome.
Using self-control and taking some extra time to plan and calculate saved my family a lot of money this week.
Bonus Links:
Dave Ramsey on the Cash Envelope System
Suite101.com on the Envelope Budget System
Leave Your ATM Card at Home by Liz Pulliam Weston
How To Track an Envelope Budgeting System in Quicken
I Do Not Use Credit Cards by J.D. on GetRichSlowly.org
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Thanks for all the links! I’m very impressed with your discipline.
If you want something similiar without the cash, I used mvelopes.com when I worked at a financial advisor’s office. It’s the same concept, only you have virtual envelopes so you can use your debit card and write checks.
Using the program for a number of months helped us develop a budget and stick to it. I also realized that my husband is a lot better at NOT spending money, where I can go into Target and “find” lots of things that I “need”…okay, so they’re wants!
I’ve also found that the primary “bill-payer” tends to spend money a little looser than the other spouse, so we make an effort to talk about where the money is going and what to do with extra. Paying down debt is super-fun! Seriously, who needs frivolous spending when you can pay off debt?
Yeah, my parents are fans of Dave Ramsey. I must say, after living in a cash-based society for two years, we found that, just by spending cash, we could keep track of how much we were spending and curb frivolous habits easier.
But I love my credit card! We get free miles and use it to pay for tickets (which we have to do quite often), so that’s a bonus, right?
I just got done taking the FPU class at our church. We have now been living by an envelope system for the past 4 months and love it!! Although I have to admit I do find my self with too many envelopes! thanks for the link about the virtual envelopes, I am going to have to check it out.
Sara — My parents use a envelope-folder. It reminds me of those accordion folders you use at the office, but smaller, specifically designed for carrying cash. Maybe that could work for you…