Carrying Your Budget In Cash
I’m trying a new thing with our food/entertainment budget, and it seems to be working. At the beginning of each week, we withdraw our budget in cash. Then we only spend out of that pile when buying food or entertainment. When the money is gone, we don’t get to spend anymore until next week.
So far, this method is keeping us from going over budget. Even better, since any extra money gets rolled over into the next week, it is encouraging us to save and spend less money. Likewise, when we are done, we have to stop because there’s nothing left.
A few point about carrying our budget in cash:
1. It is keeping us honest. We were surprised to find that we were almost out of money by Thursday. My husband and I thought we were keeping close to our budget, but it turns out that we had been regularly overspending without realizing it. This method showed us that in no uncertain terms, and it was a good thing to learn.
2. We learned what our budget feels like. Now we know how it “feels” to spend the amount of our budget. In the future, I will know approximately how much food/entertainment I can have in a week for that amount of money.
3. I am spending less. When I have $20 left in my wallet and that’s all I get, I am more likely to shop for bargains and weigh every penny before spending it. It is keeping me frugal.
4. It is making me more creative. Instead of spending money, I am more likely to use what I have or to do without. Instead of going out for a bottle of wine when I had a friend over, I improvised cocktails. Instead of going out for breakfast, I made a satisfying one with oatmeal and mulberries. My incentive here is to save as much money as possible so I can have more fun with what’s left.
5. No surprises at the bank. Although we never overdraw our bank account, this way it’s not even a possibility. The money comes out at the beginning of the week and that’s that. No surprise dinners that I forgot about and have to transfer extra money from savings to cover. (A rarity, but it has happened!)
This method only works if you are disciplined about spending cash. But if you are, I suggest trying your budget in cash, if only for a few weeks. It simplifies the matter and forces you to keep to it.
