One of the most frustrating things about using cash is that no one knows how to deal with it anymore.  We’ve become such a credit/debit oriented society that handing a cashier actual bills and coins is just going to confuse them.  They don’t know how to make change.  They don’t pay attention to anything that isn’t right there in front of them on their machine.  And they don’t listen.


So I’m On Day… I don’t know. Twenty Two? I have about a week and two days left and six dollars in cash left in my gas fund. So far I’ve gone about sixty four dollars over budget out of the checking account (at least it’s cash, right?) which I think has taught me I need to adjust the budget up somewhat. Fortunately I don’t think there will be many expenses between this week and next although one never knows for sure. Today, for example, I popped into one of our local Super Markets for some ground turkey to make chili and ended up walking out with an additional four pounds of meat (I might add I got the entire thing (20 oz of ground turkey, two pounds of ribs, a half pound of ground chuck, a half pound of lunch meat (ham), and a container of chicken nuggets) for only twelve dollars…. which I paid for with my debit card. My excuse? And of course there WERE excuses…. that it was a good price and also THE TAMPA BAY DEVIL RAYS MASCOT WAS IN THE STORE. Yes, this has nothing to do with money or meat but it was amusing because he was trolling around in one of those little electric carts, buying papayas. My little boy was kind of freaked out about it but overall it made shopping an interesting experience.

I’m going to work on an entry about how I normally shop for groceries, bargains, etc, and I think I’ve decided to view this first month as something of a trial and error. I have learned where I need to increase my budget a little (gas and miscellaneous). I know six dollars isn’t going to get our cars through the next week, especially with my partner driving to school every day. Hopefully next month will be a more successful venture and I’ll have more capital in the envelopes to start out with. I suppose the good thing is nothing has gone on the Credit Cards and it’s all come out of the checking account. Plus we’re only a little over current budget. That has to be good for something, right?

So this is something of a confession/failure that happened this past week. Basically it occurred at a “candle party” a friend of mine threw (the company and friend will remain nameless to protect the innocent), where you get together, look at candles, and then buy said candles, hopefully LOTS of them. The problem is I love things like that. Partner loves things like that. So pretty and smelling good. And then there’s the fact that part of the MO of said company is to put a bunch of women together in a room, give them glasses of wine, and then talk up all your products while their will power to buy steadily decreases. Not that I’m complaining, I had a good time. They had some nice bargains, and I got some things I really liked. BUT. None of it came out of my budget. I did pay cash for it (actually I wrote a check) and thankfully the cash was there in the account, but I think I can safely say I hadn’t budgeted for drunken induced candle buying when I was thinking of things I was going to be buying in the last month. So rather than take away from say… oh food, I just decided to cut that as a loss and a lesson. It’s not something I do frequently in any case, but it is a reminder that putting money away is a good thing. Later I’ll probably go into some of my “money consciousness” and all the things that affect how I spend and look at finances, but that will come later. I have, however, decided that next month (when our household income will take a little notch up) to set aside a small amount above and beyond the budget IN cash, and keep it in yes, you guessed it, an envelope. I have several things I’m saving for, most notably (and embarrassingly I know) a Wii, but money for extra expenses like this, things like glasses and eye exams, dental expenses, birthday gifts, short vacations, etc would be good to have already set aside so as to prevent the temptation of reaching for the dreaded C.C.’s.

And yeah. As an aside, when buying or God forbid actually using candles try not to drink. At least all I did was spend a rather embarrassing amount as opposed to burning the house down.

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.

  1. 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.
  2. 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.
  3. Never take more out of the envelope than you need.
  4. 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.
  5. 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.
  6. 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.

A few weeks ago with good intentions, I decided to begin a “Cash Only” Experiment for Budgeting. Pretty much everyone I’ve talked to thought it was a great idea, but so far I’ve only run into one other person actually doing it. My partner, I think, considers me a bit insane, particularly when I make her go inside the gas station to pay while I pump. I do this myself, of course, when I’m in the car alone, and I’d forgotten what a pain it is (or I’ve just gotten utterly spoiled by the convenience of pay at the pump, probably the latter.) Thankfully she agrees that it’s a good idea in theory.

Now to see how well it works. We started this on.. April 6th. Basically that means that I have another two weeks left on this current budget until it switches over on May 6th. Things are… going. I definitely think we’ll be able to make it, although there have been some minor sidetracks (clothes shopping on Sunday – with sales and an extra twenty percent off coupon) took care of a nice size chunk of this week’s allowance. It was necessary shopping though, trousers for the kiddo, some work shirts for both of us. Yeah there was a Spiderman shirt thrown in, but who doesn’t need one of those?

The good news is that having a fixed idea of budget that is definite and held in your hands goes a long way towards controlling impulse spending. The debit card, convenience aside, makes it far too easy to just swipe and go. Let’s not get started even on Credit Cards.

Pretty much the plan is simple. The Budgeted money is there. If we go over it comes out of the next scheduled amount (and this is only for essentials like gas anything else can wait until funds are available again. There’s always peanut butter and jelly). If anyone is wondering if I use the envelope method I hate to disappoint you. Any money not on my person resides in a very clever hiding place, from this point on called the VCH.

If we can’t pay cash for it and it’s not in our budget we don’t get it. Period. Yes this is leading to all sorts of inventive spending and coupon use (that 1/2 off second entree at our favorite Mexican place the other night was just as good as the full price one and that double coupon week at Kmart *yes Kmart* netted me a package of pull-ups, two bottles of body lotion, carpet cleaner, and toothpaste for under nine bucks). But this is a GOOD thing. We’ve started going to our local library every week to take out books and movies and play on the swings. I got free tickets to see Bob The Builder by taking an online survey from our local Performing Arts Center. We’ve started cooking at home a heck of a lot more and I’ve lost weight in the process. We’ve started getting back to times when things were just a little bit simpler, even if they’re a bit more work and a bit less convenient, and part of me is realizing it’s about time!

About the only exceptions I’m making is for little things. I will likely still buy Itunes with my credit card, but pay it off out of the fund every month. (Paying 99 cents for a song you like as opposed to a whole album is still saving money). But other than that…. our checking account is pretty much just for bills now (and that’s all done online or through automatic bill pay).

So far the first two weeks we went 25 dollars over budget on gas and some groceries. It came out of this next fortnight’s amount. As of right now I have just over a quarter of my total budget left to get me through till the sixth with a mostly full refrigerator and no pressing social plans.

About three years ago, my husband and I looked at each other and realized that our spending had gotten out of control. Incredibly horribly way out of control. We’d tried to budget and had managed to beat back some of the problems, but it just wasn’t working.

At the time, we had two separate accounts. Mine was for the household expenses (food, clothes, gas, etc.), his was for the static bills (mortgage, electricity, etc.). The problem was… I was still paying for everything right off the debit card. I thought to myself: if I don’t have money in the account, I won’t buy it. But it didn’t seem to work. I wasn’t accountable for what I was spending because even though it was linked to a cash account, I couldn’t see it. Touch it.

And thus, started the cash only budget.

For the last three years I have taken money out of the bank twice a month when I get paid and put it into little envelopes. The folks at the bank remember me: I’m the crazy lady who has very specific ideas about how she gets her cash and doesn’t like fifties. It’s taken me some time to figure out what I’m budgeting for and honestly, its still an evolving process.

Right now, I have the following envelopes that I fill twice a month: gas, haircuts, kids, piano lessons, books/music, household. If I have to go shopping before I get cash? I use the debit card that comes out of that same account and subtract that from the cash I get. And sometimes that’s a very calculated thing, like when BJ’s sent me a $10 gift certificate if I use my MasterCard. I’m not going to sneeze at ten bucks! So I shopped first, paid with my card, then took out that much less when I hit the bank right afterwards.

Everything else is paid electronically and is mapped out and budgeted. The husband pays the biggest bills, and I’ve got a smattering of other bills now that our jobs have shifted somewhat.

This methodology has been very very helpful when budgets have needed to change. After Katrina, when gas prices went up so remarkably, I realized that I was stealing from the food money in order to keep the cars on the road. Two things happened. We immediately changed out driving patterns to minimize gas usage (really freakin’ hard with two kids going in opposite directions!) and we increased our gas budget after figuring out where we could pull it from.

A few years later, here we are with that same gas budget… and lower prices. But we’re comfortable with the current budget, and gas prices could go back up. So we certainly don’t want to take that money OUT of the budget. Instead, we know camping season (and for us, that means towing season) is coming, with increased cost for gas all around. So every two weeks, when I put new money into the gas money envelope, I take out what was left over and put it away for the summer vacation fund. Specifically ear-marked for towing gas cash, and as a just in case oh frak gas went back up to $4 a gallon fund. Just in case.

I don’t want to get caught out again. And that’s what this budget is all about.