It is May 21st and I haven’t used credit for almost 8 weeks. I’m pretty sure (fingers crossed) that I’ve killed my bad credit habits similar to killing my shopping habit. I still like to shop but hardly do it EVER anymore.
In fact, I’ve killed so many habits it boggles my mind. Mindless shopping ($4000 a year), emotional grocery shopping (thousands), and the list goes on. Going to a cash budget though has been for lack of a better word:
EPIC.
It has been epic because I also started freelancing at the same time that I made the decision to break up with credit. Let’s just say that when you have NO cash, it is very, very, very hard not to use credit. Luckily I have a very well stocked pantry and personal products or else I would have started charging. I just thought that it is absolutely ridiculous to expect to pay down debt if I still dabbled in with credit.
That’s like a shopaholic who decides to occasionally go to the mall to, you know, browse. That’s a mistake about to happen. But life is full of lessons. And I had to do a lot of work so that I could even emotionally tackle killing my debt for good. And I have a lot of compassion for people who struggle with the debt repayment process. Especially if their head is distracted by other issues. No stones are thrown from over here-I feel your pain.
My New Cash Budget
I need a few more months before I think I can affectively address how to manage a cash only budget on a variable budget. I will say that part of making it work is deciding that cash is your only option.
Here’s a brief look at my system:
- Weekly Withdrawals-Since I have a variable income I consider what I would like to have happen during the month and then I split it by each week. Then, I withdraw the cash that will take care of the week that I’m in. This will change once I replenish my savings.
- Cash Envelopes-I DO have cash envelopes that I keep cash in at home. But they aren’t practical for carrying around and who wants to carry every cash envelope that they have?
- What’s Happening Today?-Consider what I plan on doing each day and then make adjustments to what is in my wallet for the categories I anticipate spending on during the day. I normally spend during the week on the following categories: transportation, coffee, fun, and groceries
- Free baby, baby FREE-I try to do as many of the above categories for as little money as possible. If it ever warms up in Colorado again (and stop raining and snowing) I will begin riding my bike around town instead of taking the bus. My fun is pretty cheap now because I try to do things that are…ahem..free. I order the smallest sized coffee (always have) and I only order coffee/cappuccinos/or lattes. Very rarely do I order specialty drinks.
My Hack
I have to be honest and say that the idea for this hack I found on Youtube. One of the problems with cash envelopes is that they tear up. I didn’t really want to spend money on a way to save money. I decided to look for ways to improve my system and this hack is so ridiculously simple that it’s embarrassing.
And, I used what was already in my home.
First:
I looked for something to create a divider for my money. FOUND IT! I had these super cute tiny envelopes and sticky notes. Those would pair together nicely.
Second:
I thought about the categories where I spent predominantly in cash and then wrote the category on my green sticky notes.
Third:
And this one is so easy it’s ridiculous-I had them laminated. Yep…that’s it. I went to Office Depot (and caught a guy stealing in the store) and then got my envelopes laminated. Total spent: $5.46
In the Wallet:
They are small enough to fit in my “Happy” wallet. The key is to avoid switching money from category to category (I’ve done that in the past).
Love it!
Do You Use A Cash Only System? How Does It Work?
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I use a cash system for my monthly spending money — groceries plus other small things (movie tickets, postage, dry cleaning). I love doing that because it keeps my random spending pretty restrained, while not being as complex as an envelope system. I track everything else in YNAB, but the cash I just take out at the beginning of the month and then divide it up by week — I replenish my wallet every weekend.
I’ve done a pretty decent job of managing my spending. BUT I think that I still spend a little more freely with my debit card than with cash. It sounds like we have a similar process.
well done on not using the credit cards for eight weeks! We use our debit cards, I haven’t carried cash for years now. My husband spends less with a debit card ( though still too much lol!) with cash he just spends it cause its there. I like your little envelopes, are they just laminated on the back and not the front?
I am really trying to cut down on the debt card usage so I’m really excited to see how the cash system works. I like it a lot so far…until I want something LOL!They are completely laminated so they will last forever!
I’ve tried it with you name it, envelopes, jars, budget binders. I could never get it to work for me. The challenge is my job, I have to front my work expenses and those I usually put on a credit card. It got to the point where I was juggling between cash and credit and it made me mental. I also prefer to collect travel points 🙂
I know what my budget is for all my categories and I just make sure I don’t spend more than my budget. I know exactly what my biz card and personal card balances should not go over each month and I stick to it. The only drawback is my nasty clothing habit (that I’ve since kicked) which would have me pulling out a credit card for.
I just don’t understand why your job doesn’t issue you a work credit card? At my old job I had one issued for travel and one issued for work related expenses. I could totally see how it would be challenging to rock any of these systems if you have to front your work related expenses. Sigh.
That’s a great idea for keeping your cash organized. We just drop our cash for the month in a bowl in the cupboard. When we need to pick up groceries or gas, we just grab it out of the bowl. Not the most organized system, but it seems to be working. Good thing no one ever looks in our cupboards 🙂
I wish I could say it was my original idea LOL! But-I found the idea on youtube. I just wanted to create a more sustainable system that was easy to manage.
Cash only system works! I cannot spend it if I don’t have it. This is my mantra for years. Living entirely in cash has been a great experience. I can only spend exactly what I have compared with having credit cards. However, the disadvantage probably is that this can hurt my credit score
It just didn’t make sense to use credit on any level as I’m trying to pay everything off. It was like shoveling sand out of a hole and then putting sand back into the hole. It just didn’t make sense.
I love this hack! Nice job making it look fun and creative 🙂 I will be using cash for fun money and using debit for groceries, so I’ll be not using credit as much anymore. I’m excited and love seeing your progress with the cash budget.
I like shopping for food too much so I’m not allowed to bring the debit card 🙁 I had a lot of fun putting it together. And when I went to Office Depot I helped catch a shoplifter-really!
Love the DIY system. Where did you get the mini-envelopes? Congrats on catching the thief!!
I bought them awhile ago and had planned on using them for little gifts. But, I never did anything with them. They are really working so far. Will keep everyone posted on how it goes.
I love your dividers–super cute. I don’t carry a lot of cash around, just for groceries and my blow money. But I use our debit card for just about everything. I used to put everything on a credit card and then we paid if off at the end of the month, but I was always scrambling to pay off the bill and that made me feel broke. Using a credit card that way isn’t really budgeting. I have hacked my quicken to allocate our funds to our different categories in our checking account and I never feel broke anymore.
I was really excited to find the idea on Youtube (wish I wrote down the blogger’s name!) It has been really helpful and is working really well so far. My big issue was that I still spent pretty freely with my debit cards. I was mindful of my limits but I think I spent a little more with plastic than I do with cash. I seem to…hold on to my money a little more tightly with cash LOL! I really like having the cash on me.
Those envelopes are super cute!
I had a lot of fun putting them together!
I use a coupon divider because it has these built in dividers in it. it really helps keep my cash sorted. 🙂 Good idea!
I had thought about doing that too but my giant bag is already super bulky. So I started looking for wallets that I could use to rock the system. Then I discovered the divider idea and it has been awesome! Keeping my money in check.