I’ve learned over the past few years that if I ever wanted to stick to a budget, I had to use cash.
I don’t know what it is about using a debit card that makes me not stick to a budget. It’s just so convenient, and easy to use. Something just feels so good about swiping your card and not needing anything else to purchase my favorite ice cream. Either way, when I use my debit card I forget about how much I’m actually spending, until I look at my expenses at the end of the month. Maybe it’s because I need to physically see the cash leave my hand to understand that I only have a little bit left in the month.
You know, that’s probably it. If you can physically see water leave a bucket, you can more understand how much water is left.
Ok, enough with the metaphors.
Onto the Cash…
This past week, when my family went to the beach, Robert and I decided on a budget of $300 for the entire week. That was to include eating out, groceries, and any souvenirs we wanted. Thankfully, we cooked at the beach house or had leftovers most of the week. If you want to learn about how we saved so much money on vacation, check it out here.
So with our agreement on the number, the plan was also in place to use only cash for the entire trip. The only thing that we used our debit card for was getting gas. Honestly, that was just because we’re lazy and didn’t want to go inside to pay for gas. But also, because we didn’t want to risk the desire to spend money on snacks that we don’t need.
At the end of the week, we not only stuck to our budget but had cash left over!! That’s right, it was a total success!
Now that we’re home from vacation we decided that we can handle making cash envelopes a regular thing. We’ve tried it before and failed but I am determined to succeed this time. We’ve only failed because we didn’t use cash for EVERYTHING, just when we were together.
So we either need to figure out how to split up the cash envelopes or just don’t spend any money separately. Control is the key to cash envelopes I guess.
How to use the envelope system
At the beginning of each month, we’re coming up with our budget. With that we’re figuring out how much to spend on all of the variable expenses. I think that it’s best to just worry about variable expenses to not bog yourself down, that and you have more control over the amount of them anyway. Of course, you’re coming up with your variable expenses from looking at what you have actually paid in the last few months and figuring out what is realistic for you to handle. This will help if you’ve been working on your zero based budget.
Here’s our monthly budget for variable expenses that we decided to use cash only
- Groceries: 300 (we normally don’t reach this, because of the savings we get at Aldi)
- Eating out: 150
- Fun money: 100
That’s a total of $550 a month, which divided into weeks is about $140 a week.
Why we failed before
Before I would try to split up the money that goes into each envelope based on when we got paid (which is about twice a month for each of us). I could never keep it up because my paychecks are on the same days of the month (9th and 23rd) whereas his are every other Friday.
It got way too confusing for me, especially when most of my first paycheck goes to pay the mortgage and utilities. I didn’t ever have enough left over for the cash envelopes.
While the paycheck schedules haven’t changed, I am determined that once our emergency fund is funded we are going to try again with the cash envelopes. So we decided to get out the $140 every single week. That way it makes it easier to plan out things to spend our money on.
I personally though, don’t like carrying around envelopes. Especially since I barely carry a purse anymore, I carry a wallet in a boyish diaper bag. I need to buy myself one of those awesome diaper bag/purse/cute bookbag things. Like these:
No Katie, you don’t need to spend money to do this. That is way off the point. Anyway, If we make it into something that be easily handled like an accordion file, I can take it anywhere. Those are cheap too, I’m talking Dollar Tree or Target dollar spot cheap.
What’s the plan you ask?
Either way, I’m going to get an accordion file, and separate the money accordingly (haha, I made a joke there, did you catch it?). The idea with the cash envelope system is that once the cash is gone, there is absolutely no more buying anything. Especially with a debit card or credit card. Any extra cash that is left over from week to week can just be rolled into the next week. And to make it even easier, loose change gets put in a piggy bank so it will be saved for later.
It’s called self-control people. I’ve got to have it, Robert’s got to have it. We all have to have self-control if we want to reach any financial goals.
What things are you doing to reach your goals?