Cash Only System: Can it work?

Once again, I am attempting to live mostly “Cash Only”. I read The Total Money Makeover by Dave Ramsey many years ago. I bought all the gadgets to live on a cash only budget: the envelopes, the wallet, and an envelope system. My problem was always the same: I’d forget to write down how much cash I was taking out of the envelopes and even forget to get the cash out of the bank. So, without a doubt I would run out of money and end up using my card.

Why am  I coming back?

For me the benefits are as follows:

• I have to restrict myself to what cash I have
• I can visually see how much I have to spend
• I can track how much and how quick I am spending my money
• It gives me a sense of accomplishment when my wallet isn’t completely empty by the end of the month!

So how am I going to do this differently?

1. Organization: I bought an awesome wallet on Amazonthat my sister showed me (she has been using this system for a few months and she has been able to pay off alot of bills). I labeled each category on the tabs and fill it with money every 2 weeks.

2. Accountability: I have a great app that helps me to organize my money digitally! Its called Spend. I have organized each category to reflect my envelope system.

3. Getting the cash: This is where I’ve gone wrong in the past. My goal is to go to the bank the first monday after payday and withdrawal the amount I need for two weeks. I only put in my wallet the money for 1 week (would hate to lose it) and then fill on the weekend.

4. Spending too much in one category: Another problem I have is that I overspend in one category (usually food) and I end up grabbing money from my other categories. Now, I transfer on Spend so I can also have a record of how much I moved over and how much each category should have left.

How I’ve determined the amounts for each category is that I keep track of how much I spend in each category for a while and average it out. Also, there are some categories (like eating out) that I have to restrict so I pick an amount and try to stick with it.

With the holidays coming its REALLY important that I budget.

Oh, and by the way, I use my Spend app for Christmas too. I’ll tell you about it later!

Ligia