The Cash System: Actually Kind Of Fun

8 Nov

Hello, and welcome to the budget tip of the week.  I know budgeting posts may not be as exciting as sky diving or white water rafting posts, but I firmly believe that people (and even ‘young adults’) can take control of their finances and quickly enter a debt free lifestyle.  And although that may not give you the rush like jumping out of a plane or bouncing over frothing water would, it will give you the peace of financial freedom (which is officially equivalent to 5 or more sky diving sessions).  I typed this dramatic preamble to lead to a simple concept…the cash system.  Here are a few reasons why I think it works and why it is worth trying out!  The general principles below come from common sense and the guidance of Dave Ramsey.  Check him out, his book ‘The Total Money Makeover’ is a great resource for no nonsense money management.

Easy to Keep Track of Your Moolah

Every other Friday, my husband and I pull out a certain amount of money.  And we are expected to live on that amount of money till the next ‘Cash-Money’ Friday.  Once the money is gone, we are done spending.  It is that simple.    And we make sure to leave ourselves very little reason to use our debit card (note I did not say credit card, we don’t even have one of those, extreme, I know) between Cash days.   We use cash for groceries, gas, minor car maintenance (oil changes etc), clothes, haircuts, and fun (movies, eating out, putt putt golf, you fill in your own fun blank here, etc).  With this technique, you can emerge from the shadowy land of over drafting your account, buying a McDonald’s meal on your card, digging through your car seats to find all those crumpled receipts, and generally wondering where all your money goes.  Oh, no!  You will be in control, baby.

Simple to Separate

The key to the Cash System is separating your money into different categories.  Once we get out the cash, we separate it into different pockets of the very cool money wallet thingy you see above.  Okay, it is not cool at all, and you may feel really dorky bringing that thing out at restaurants and stores, but believe me, it is ultimately worth it.  I separate the money into week 1 groceries, week 2 groceries, gas, and fun money.  I then give Ike his personal fun money and stash away my own.   This is where it gets fun (fine, it is a relative term here)… Say one week you don’t spend as much as you budgeted for groceries.  Well then you can plop that extra money right into the fun money slot.  You can go out for an extra date that week.  Or maybe, if you are really disciplined, you can start a Christmas or vacation fund.  Every little bit counts, and before you know it, you may have enough cash for all Christmas purchases.  So while all your friends are belly aching about their credit card bills in January, you will try your best not to be smug as you explain the beauty of a cash system.

Harder to Spend

This is a mental thing, but it is harder to fork over cash than to swipe a card.  When you hand over bills you can see your money supply dwindling.  This view allows you to take a second and assess if you really need those pork rinds or that (insert your own tempting item here).  The thought of having money to bank at the end of the 2 weeks is ever alluring and it will make you think about each purchase.  I guess the cash system makes money REAL.  It changes it from this pretend currency that magically comes from an overflowing spring activated by your card to a precious and limited commodity that needs to be used thoughtfully.   Deep, I know.

Ok that is enough (see I budget my words too!).   I hope that I’ve inspired you to go buy that awesome money divider thingy, and try your hand at the cash system.   Best of luck as you embark on this common sense, proven, and ultimately fun system.

Special thanks to this guy

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