All About The Money

Since A & I are in the midst saving for the biggest purchase of our adult lives, I thought I’d share the biggest piece of advice I could give to anyone else in the same boat.

Two words: cash budget.

Now you might be asking yourself, who the heck uses cash anymore??  To a lot of people, cash is archaic.  It’s something you grudgingly withdraw from the ATM when you see the dreaded “cash only” sign at a nail salon or bar.  You have your debit and/or credit card, and you’re able to put some money into savings each month.  How will carrying around cash help?

The system that Andrew and I live with is so simple that anyone can do it.  Here are the steps we follow:

1. At the beginning of each week {Mondays for us}, we each withdraw from the ATM our own personal cash budget for the week.
2. During the next 7 days, that is the money we use for any personal expenses, such as eating out, happy hour, shopping, movies, etc.  Basically any expense that isn’t rent, utilities, groceries, or gas.
3. Repeat weekly.

The process is that simple.  But the rewards are AMAZING.  Here’s what we love about having a cash budget:

• Availability.  It’s easy to pay a friend for your portion of something, or to not have to track down an ATM for those inevitable “cash only” scenarios.
• Limited budget.  When I was using a debit card regularly, I can’t tell you how many times I would try to stick to a budget, but then I’d pull out my debit card and think, “Well the money is there, going over a little won’t hurt”.  But even a little cheating can add up over time, and at the end of the month I’d realize that I spent way more then I meant to.  Now I don’t worry about that.  I can spend what’s in the my wallet…and that’s it.  Nothing more.  It’s guilt-free spending because the money that I’m spending is meant for me to spend, and I’m not spending anything beyond that.
• Personal spending.  Marriage is great.  Don’t let anyone tell you otherwise.  But all people need a little personal space, and it’s no different when it comes to money.  My weekly cash is my money.  I get to spend mine in whatever way I want, and Andrew gets to do the same.  We’re working together within the same budget, towards the same goal, but both of us have the freedom to do whatever we want with our weekly money.
• Delayed gratification.  I’m the first to admit it: I’m an impulse buyer.  If I see something I want {no, need!}, then I want/need it immediately.  But if it’s on the spendy side, perhaps over my weekly budget, then I can’t get it right away.  Instead, I need to set aside money from each weekly cash withdrawl until I have enough to buy it.  Which leads us to two different outcomes: 1) I save and save and save, and then when I finally buy the object of my obsession, I love love love it; 2) I figure out that I don’t want/need it that badly, and therefore never spend money on something I wouldn’t have loved anyway.  It’s a win win.
• Cuts out mindless spending.  When you’re using a debit card, you’re removed from the act of spending your money.  You simply give the cashier a piece of plastic, and it magically pays for whatever you’re buying.  But when you have to go through the act of counting out 5, 10, or 20 dollar bills…you become attached to them.  You almost don’t want to hand them over to the cashier.  Handling cash makes you much more consious of what you’re spending your money on, and if you really need it.

Try a cash budget for one week.  Pick a reasonable amount of money that you think will get you through a week.  Maybe it’s $100, or $140, or $80 (I like to pick amounts that are divisible by 20, since that’s usually the only bill ATM’s dispense).  Try to use only cash for the week, and see how it goes!  I’d love hear your stories!