Cute name for my new project, eh?
That “Life takes Visa” commercial has always annoyed me, even when I used to swipe my card like a drunken shopaholic. The whole idea that people who want to pay cash or even ::gasp!:: a check are annoying to others just struck me the wrong way!. (I could rant for PAGES about that commercial, but I’ll spare you!)
Anyway – we have just completed Week 1 of “Life Takes Cash” in our household and boy was it an eye-opener!
We long ago took the credit cards out of our wallet, only using them for emergencies. As of last Monday, we have both removed our Debit Cards as well and switched to an entirely cash-based life (outside of paying bills), also known as “The Envelope System”…created and perfected by our grandmothers and great-grandmothers and brought back in to popularity by Dave Ramsay with his Total Money Makeover.
We created a zero-balance budget. (As I mentioned before, my favorite [free!] spreadsheet that I have found for doing this can be found here.) We entered our monthly bills, figured out a reasonable monthly spending “allowance” for each of us (Brad gets gas money, “blow money” and “Lowes money”, I get grocery/diaper/gas/household/blow money and I am the keeper of the clothes, car repair, babysitter and eating out funds). Every penny that was left after that is put towards paying off the credit card/car loan and increasing our Emergency Fund. As Brad gets paid every other week, I figured out totals for each paycheck and with those amounts, I cashed a check at our bank and divided it up among envelopes. For the next 2 weeks, we just go about our merry way, only paying for things by pulling cash out of the envelopes.
The result? So far I am about 30% ahead….meaning I didn’t spend anywhere near my allotted budget. I even managed to get through the week only spending $32 in groceries instead of my budgeted $50.
There is something very powerful about having to pull cash out of an envelope for something rather than just swiping a card (even a debit card). It really makes you stop and think “Do I really need this? Am I willing to not have money for this category for the next 10 days if I buy it?”.
Of course, the week was not without its comedies.
When my older son lost 2 teeth in 1 day (And one because it was hanging on by a thread and Brad yanked it out because we were afraid he would lose & swallow it in his sleep), the resulting conversation of “Who has to use their money for the tooth fairy?” was extensive. Hey! Did you know that the going rate for a tooth yanked from the skull by Daddy is $5?
The other was outside the beer distributer. We do like to keep beer in the house and a case of Yeungling is $19. But since I usually will drink 6 out of every 24, I figured I only needed to pay $4.75 towards the suds and the rest should come from his money! Brad tried arguing that beer was “food”, since he doesn’t eat as much when he has a few beers and therefore the entire amount should come out of the grocery budget. (we ended up splitting it 50-50, but I took the money out of the “Entertainment” envelope since he gets pretty funny after a few beers)
No – we’re really not that bad….we were just finding ways to laugh our butts off at our new “forcing ourselves to act as if we are broke” lifestyle.
So it’s only the end of Week 1 and we are still in the “fun stage” of our new system, but it was a pretty good week!
Do you use a cash envelope system in your house? Would you consider it? Would you like to take the plunge and join me in this project/new way of life? Why or why not?
