Paying Cash Only – 52 Week Money Savings Challenge Week 17
It’s week 17 of our challenge and I’m excited to talk about the tip for this week because paying cash is something we recently went through and it has really helped us! Before you think I’m encouraging you to scrap the debit card and online banking, no! Stick with me for a few minutes and you’ll see I’m only talking about certain categories and which ones have helped us.
When I started this challenge earlier in the year, I thought we had a good handle on knowing where our money was going. After all, I had a budget so I was all good, right? Wrong! The budget helped tremendously, but I was still going significantly over my budgeted amount. I was trying to figure out a way to help us when I saw a Dave Ramsey mention of the envelope system. I’ve tried the envelope system before but I ran into some problems. 1) I was using paper envelopes that kept falling apart and 2) I was trying to pay every expense I could in cash. Talk about frustrating.
This time I sat down and figured out what categories I should be using cash for. Our bills like car insurance, cell phone bill, mortgage, gas and electric, etc. are all paid through online bill pay and since the amounts are pretty much the same month-to-month, I didn’t see a need to go cash pay on those (after all, we weren’t really going over on those bills). However, expenses like food, misc, offering (tithe) and gas, those I decided needed to be cash paid. Food and miscellaneous were the two categories we were constantly going over budget in.
I averaged out what we spent each month in those categories and if they were too high for our budget, I’d drop them down to an amount that fit within our budget. After I figured out what the total monthly amount needed to be, I broke it down into 4 weeks (5 for those months where we receive an ‘extra’ paycheck). Now that I have my weekly amount written down, I can easily go to the bank, withdraw the amount we need and disperse it into the proper envelopes. I keep groceries and miscellaneous separate. I have been amazed on how much more careful we are at spending money.
Grocery shopping takes extra long because I use a calculator and keep a running tally as I shop to keep me within budget. I also go to more stores to get the best deals.
One of the things I did after figuring out how many expense categories I needed for cash was to research envelopes. I didn’t want to use regular envelopes because they wear and tear easily when stuffed into a purse or carry change. I found some letter sized poly envelopes that have worked out very nicely. You could also try a poly/plastic coupon organizer. And all the change I get back goes right into our money jar when I get home.
- Figure out your budget
- Decide what expense categories can be paid in cash
- Break your monthly budget expenses down into weekly
- Set up an envelope system
- Withdraw cash when you’re paid and disperse to your envelopes
- Use a calculator to keep a running tally while you shop
- Save your change for your money jar
Do we still go over? Sure. There are days we decide to treat the family to an inexpensive meal out, or we need yard supplies. Going over still happens, but not nearly as often nor nearly as bad.
Do you pay with cash? I’d love to know how it helps you and if you only do it for certain categories or across the board.
PS I have since stopped using cash for gas. It’s way easier to use the debit card at the pump and keep track of what we use. I try to write down every gas purchase to keep track and we know we can’t go over a certain amount. Plus, when my husband needs gas when going to or from work and he doesn’t have the gas envelope on him, it just became more of a pain than a help and wasn’t saving us anything.
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I’m so glad to have you on this journey with me. I’m looking forward to each week and I hope these posts and the emails are not only helpful to you, but encouraging as well.
- If you are new and just now joining, subscribe to the weekly email and download your own copy of the 52 Week Money Savings Challenge printable. All current subscribers are entered into an Amazon drawing held at the end of the month.
- If you want to catch up on the reading of each week, go to our 52 Week Money Savings Challenge page and check out each week listed, as you’re able. Don’t worry about catching up on savings amounts unless you’re able to, just start with the current week and add extra if/as you’re able.
- Want to open an online bank account to help keep things separated? I personally use Capital One 360 and have for years. It takes a few days for transfers to complete if you’re using a local bank