Monday, September 8, 2008

Back to Cash

Brittan and I started an experiment in money management a couple of weeks ago that is already paying off nicely. We've gone back to paying cash!

We got off the credit card merry go round some time ago (in fact, I would guess the last time we we had a credit card balance was probably sometime in 2005. Oh, we've used an American Express for booking plane tickets and the like, but we use that like a cash card for budgeted purchases higher than our daily limit on our debit card. But its only for budgeted purchases and is paid off within 24-48 hours of the charge hitting the account.

We use our debit card a great deal. We use it for groceries, for eating out, for paying bills online, for purchasing clothes, buying gasoline and a whole lot more. But we noticed while working our budget a couple of weeks ago, that we've had some "spending creep" find it's way into our bank account. We've been over spending our budget on eating out and groceries and the like, leaving a shortfall in a couple of areas like, clothes and mad money. So we decided to go "old school" and revert to the "envelope system" like we used in the beginning stages of our debt management plan. This time, we only use a few envelopes: groceries, eating out, 'mad money' and clothes. Next week I'm going to add pet supplies. Everything else is done electronically. Our bills are paid online (and most of them are automatically debited), and we have a couple of money market accounts attached to our checking account so we can move money in and out for things like Christmas, vacations, emergency fund, etc. The only checks we write are to the Church for our tithe.

Anyway, in only two weeks, by paying cash rather than using debit cards, we've actually gone UNDER budget in the categories in which we've been over spending. It's just like back in the old "get out of debt" days, when you have to part with actual greenbacks, many things are just not as tempting.

Saturday was a classic example. We were hungry and had some shopping to do, so we discussed where we could go out and eat at a reasonable cost and stay on our Weight Watcher program. After discussing several items, I said, you know what, let's just eat before we go and save the cash. B thought it was a great idea and that's exactly what we did. Cool!

It's fun. It's nostalgic and best of all, it has left cash in my wallet. We even made logos for our shirts that celebrate the theme. They say, "Go Green.........Pay with Cash!"

What can I say, we're corny and we like to brag about it!