One of the biggest fears of going cash only is that cash is, well, cash. It’s right there, physical, in your hands, which is a huge advantage. You know exactly how much you have.
But it’s also something that’s irreplaceable if lost. If you stick a twenty in your pocket and it falls out when you pull out your keys… it’s gone. If you forget where you put your grocery fund envelope, or leave it sitting on the counter… it’s gone. It’s not like a card where it can be canceled and the electronic money is still safe on the other side. It’s real, it’s physical, and it changes hands very easily.
That said, we’ve only had problems twice in the three or so years we’ve been doing this. Once was early on: I grabbed the grocery envelope and took it with me to go shopping, and I think I left it in my car, except I never found it again afterwards. That was about $20 lost. The other was more recently, and far more annoying: Kev took $40 from the gas fun to fill the tank of his car and put it in his pocket, and sometime over the next several hours before we actually got to the gas station, it must’ve fallen out because it was gone. I keep hoping that a random pair of twenties will reappear in the house somewhere, but not yet.
In both cases it was painful, but it was survivable. And we’ve learned important points over the years to help manage this, so you’re safe as possible.
- Keep your money in a consistent location. Wherever it is in your house, always put it there, always put it back there when you’re done getting money out of an envelope, or done with an envelope entirely.
- Don’t carry the money unless you need it. For two reasons. First, if you’re carrying it, you’re more likely to spend it, especially on things you didn’t mean to spend it on (hey, I’m bored, let’s go get lunch since I’ve got $10 in my pocket, I’ll buy gas another day…). Second, if you’re carrying it, you may be carrying more than you need, and you may misplace it. Don’t tempt fate! Leave your money be until you need it.
- Never take more out of the envelope than you need.
- Label everything. Your envelopes, or however you break out your budgeted money. Make sure it’s clear to you which money is for what things.
- Don’t just deal in yuppie food stamps. IE, don’t take a stack of twenties out of the ATM and expect that to work for your cash. Go into the bank and get your money in a mix of tens, twenties, ones and fives. Split things out with smaller bills so you can better take the right amount. If a tank of gas costs you $30, grab that not $40 from the gas fund.
- If you have extra one pay period, don’t spend it. Save it. You never know when you’ll have an unexpected expense in that category later on.
April 21, 2009 at 6:15 pm
Yeah, I don’t keep money on me except for like a couple of ones in case I get in a jam. Otherwise it’s in the VCH. Partner is harder to remind than I am as she just put ten dollars of gas in using the ATM card (which ok I will subtract later) but it’s harder to get her used to taking the money from the VCH. Then again, she and I are very different budget wise which is why I do most of the shopping, bill paying, etc. I think the cash only method will be good for that, because it really hits home what spending does when you don’t have ANY money for groceries because you spent it all.
April 21, 2009 at 6:22 pm
I was actually surprised how little time it took us to switch over to the little envelopes. (And the whinging that occurs when there’s no money in an envelope).
But hah, yeah, on the different styles. I had to get my freeform expenses out of Kev’s account because we handled things so differently. He does his static big bills, but he also handles the socking away money to save by squirreling it into various accounts where it can come back as cash later. Which works great until he suddenly increases the amount coming out of MY account and forgets to tell me (yes, this just happened last week *headdesk*). Communication is always the hardest part, and meshing styles.
BTW, the grocery changes was the Best Part of going cash only. We took a real hard look at HOW we shopped, where we shopped, and what we bought. We are less likely to waste food now, more likely to eat healthy, and Kevin has finally realized that YES that level of expenditure on groceries isn’t shockingly high, it’s actually normal. I’m also so very aware now when grocery prices go up (like milk prices climbing so rapidly in recent years).
April 21, 2009 at 6:25 pm
I agree on the grocery standpoint, I’ve always been very frugal and good at comparing, but I’m also very likely to buy things because I like them and they’re on sale or because we want them. The prepackaged types of foods were the first to go unless I can get them on sale. Overall I think our grocery spending is pretty spot on. I’m thinking I may switch to the envelope method possibly (currently i track all the expenses by tallying receipts on a program on my ipod, but that has its downsides as well). Now when I go to the grocery I really take time to consider the different brands/generics/sales and have less of a problem saying “no” to the luxury type items such as ice cream or chips.
April 21, 2009 at 6:31 pm
Okay, I’m now utterly confused on where this reply is going… but… typing anyway!
We still buy some pre-packaged foods. Granola bars are the big one, because they are convenient, always eaten, and I buy ones as healthy as I can get them. And I think my son would live on them. But we’ve always bought mostly generics, and continue to, and now if my kids aren’t eating something, I stop buying it until interest comes back around. I’m also much better at knowing what I can, and can’t, buy in bulk to save money.
I tried the tallying receipts thing and um… failed miserably. I had to go to envelopes if I didn’t want to fail, and that came from an article I’d read. Plus, when I was younger, my mom sort of did it (only with fewer envelopes). When it started being something that actually worked (and really, I sucked so badly at budgeting before this), I kept it. First thing that’s ever kept me on track.
April 22, 2009 at 7:54 pm
On the topic of comparison shopping I’m about to check out the Aldi’s grocery store nearest me. The one near my sister is good. If you don’t know them, they’re a cross between a BJ’s and a grocery — limited variety in items, mostly their store brand, presented in pallets like BJ’s but in normal quantities, you bring your own bags, pay cash or debit, no checks or credit cards.
The one back by my sister is good — fresh fruits and veggies, the store brand was acceptable on everything I tried, the prices were far cheaper than the Price Chopper that was the next grocery store in the area. Downsides are that you have to bring your own bags and do your own bagging, deposit a quarter to get a shopping cart (refunded when you put your cart back into the corral)… but I’m hoping to stretch that “food” budget a little further there!
April 22, 2009 at 8:00 pm
Thanks for the recommendation! I’ve been meaning to go into the one down the road from me and I haven’t yet. If the produce is good and cheaper than Chopper, I shall have to check it out.
April 24, 2009 at 12:51 pm
Their selection is limited — bananas, apples, oranges, grapes — but fairly good quality at the one back home. I’m going to the one in Ballston Spa on Saturday for a round of comparison shopping. Fingers crossed that it turns out well!
April 24, 2009 at 12:53 pm
BTW, have you discovered shopping at Ocean State Job Lot? Not for everything, but some things are less expensive there. I get my pancake mix (a whole grain thing the kids LOVE) there instead of Hannaford, plus treats like good chocolate waaaay cheaper. I think there is one on Ballston Spa you may want to check out while you are up there (I go to the one down in Kinderhook).
April 25, 2009 at 1:02 pm
There is one, it’s relatively in line with the Aldis I was going to go looking for this morning. Thanks for the tip!
April 29, 2009 at 2:41 pm
I start my cash-only budget on Friday, I’m nervous and excited and scared I guessed wrong at expenses and that I’ll go over and and and… I expect the first month to be hard, and for it to get easier as I go along!