You Can't Over Spend With Cash

We have mentioned in our blogs that we use a cash envelope system and we have talked about it with Greg Jeschke from WKOW channel 27 news who is interviewing the Project Money families. So you may have read or heard us talk a little bit about this vintage way to use money. However, this week wanted to spend a little more time talking about how we make it work. We have discovered this simple change has made such a huge impact on our relationship with money. When our coach, Don suggested the cash envelopes it was on base with what we were thinking that maybe this would be a good option for us. Wow was that an understatement....a good option yes....a life changing event is really what it has become!

We had the same excuses and fears everyone on has. "I wouldn't want to get up to the check-out and not have enough money" or "It's hard to get to the bank for the cash" or name your excuse...its just an excuse and there is always a reasonable way to get around any excuse. The first concern we had was getting to the check-out and not having enough money. Well if you have to put something back it only takes once before you figure out how much money you are going to spend either by writing it down as you pick up items or by keeping a mental tally. When we go to the grocery store we take our list which is on an Excel spreadsheet that also has a box for how much that item costs. We write the total of that item into the box and at the end take a few minutes to total it up so we know before we get to the check-out if we need to put something back. And yes we do know how hard that is since it is Kari and the 3 boys that do most of the shopping while Darek is at work. Usually we are tallying the shopping list up at the end of the trip when all 3 boys are totally done with the store...they are like little Tasmania devils trapped in a box trying to get out! Without bribery or threats we have figured out that having the older 2 total up the columns using the calculator, we get a grand total and they stay involved and focused. The baby...well that is another story. We take a snack just for him.

When we buy anything we first look at the cash in the envelope that it would relate to and make sure we have enough. Sometimes we don't so we have to ask "do we wait a month?", "do we really even need the item?" If it is truly a need and not a want and we do not have the money then we can get the money from our emergency fund. We have one for little stuff, one for big stuff and one started for 3-6 months emergency coverage. Since we have set goals for these accounts, and for the first time actually have savings, we are really enjoying watching these grow! It is almost an obsession to see these grow to make our future less stressful and knowing there is money to cover incidentals. The best part is they are all part of one account at summit so we can view them all at one time and we can transfer between them as needed.

Back to the envelopes...we found that the first few months of using the envelopes we would run short in a few categories. For example we have set a monthly dollar amount for our recreation envelope that at the end of the year will cover a few dinners out, soccer, pool passes, swim lessons, state park passes and a few other items with a bit of overflow for who knows what.  Well that will be great next spring when we have a nice surplus in the envelopes. But for us, soccer, pool pass, swim lessons and park pass hit us all within a 2 month period...right at the start of Project Money and our envelope system. We were disappointed that we had to take the money from what would have been our savings but as we said, next year it will be there without a trip to our savings account! That is an amazing feeling to just know the money will be there!

The absolute best part of using the cash is that our checking account looks so clean and it is easy to balance most of our account since it shows the auto withdrawals for the house, utilities, insurance etc. If we are short on cash for the envelopes then we simply write a check from our main account for the amount needed to cover...just like any bill. In our case Kari is a server and makes the majority of her money in cash and we also cash her paychecks to help fund the envelopes. When she is no longer a server we will simply write a check for cash to cover our monthly cash expenses just like any other bill. So there are no excuses. 

In the end using cash only prevents us from buying things we don't need and in a few weeks probably won’t even really want. It makes budgeting and tracking so much easer that we now realize we actually have money to save! By opening an online-only debit card through a separate checking account at summit we can even deposit cash for items we may want to purchase online! 

This week we are celebrating that we have not made one purchase on a credit card in 6 months!!!