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?
Daisy
I would have to say that I think beer should be split 50% entertainment and 50% food. No one person should be liable for any certain portion of the beer, since it almost implies that that person MUST drink that much or MAY NOT drink more than that amount. It is also like buying certain grocery food because someone likes it more - does THAT come out of that person's budget as well? Definitely - 50/50 entertainment and food. IMO of course. 😀
Good luck with this - keep us up to date on how it is working out!
Daisys last blog post..So. Wow. THAT was a busy weekend...
Tina Sprigg
I found your blog though an ad exchange and I have to say that I LOVE this post! I sincerely hope you keep posting updates for us moms to read. My husband would classify beer as food since I buy it at the grocery store...LOL!
I look forward to readin your blog more often. Thanks for the entertainment!
Heidi
Very funny about the beer money!
Please keep blogging about this, it is interesting to me. Although I am not anti-credit card, I also am annoyed by the Visa commercials. The idea is that Life takes Cash, even if you intermediately use a credit card.
Good point! And great job going under budget!
Heidis last blog post..Menu Plan Monday
kendra
I'm glad to hear that so far the cash/envelope system is working for you. We haven't tried it yet, but I am getting tempted. That's great that you're ahead. I'll look forward to hearing how you do as the weeks go on.
Darla~UltraBeautyBoutique
Yes, we use cash (envelopes). Have for years now. Makes balancing the checkbook a BREEZE. It's fab!
Darla~UltraBeautyBoutiques last blog post..Meet the wRapper family
Sarina
We started the "envelope system" during my stay in So Cal. We weren't quite so organized though. I had ALL the money for the month all at once and I took a week's worth out at a time. It really only covered food because at the time our medical expenses went far beyond where our cash let us go.
We would have continued the cash only route were it not for a "bank error" that cost us all the cash on hand. While we waited for it to fix itself we were relegated t using our credit card once again. One might say we should have just scrimped on what we had for that month, but I ask you. What's harder than living on NOTHING for a month with only your current stockpile to survive on? Living on nothing when your stockpile has been exhausted prior to a cross country move.
The plan is to go back to cash this month. It's strange, you get a better feeling when you have cash left over than when there is no cash to begin with. Or at least I do!
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