Wednesday, September 8, 2010

Taking The Cash-Only Plunge!

Well, after a mini-trial run this summer in which I attempted to buy all my groceries and paper goods with cash, my husband and I are going to take the plunge and go to nearly all cash for purchases other than bills. It's a bit scary, like jumping off of a cliff and hoping your parachute opens before you hit the ground. Did I mention I hate heights? 

Photo Credit: stopnlook

Angela, over at Grocery Shrink, has so wisely reminded me that a family tends to spend 30% less when using cash instead of checks or credit cards because it's such a strong visual of our money leaving our possession! And I could really use that 30% right now. It's just way too easy to write that check for a little more or charge just a few extra dollars to get that half gallon of ice cream I really don't need. With cash, when the wallet is empty, it's like a big red STOP sign waving in your face saying "That's it! You're done.". And while our family is not in the hole, we have some financial goals we'd like to meet sooner rather than later. Things like adding a barn, paying off the house, and increasing our retirement, just to name a few. 

It's not the fixed bills that are usually the culprit. No, not the car insurance, the cell phone bill, or the water bill. It's those pesky necessities, like food, clothing, gasoline, and... the bottomless pit called the "miscellaneous" category! How hair-raising! Do you ever track those purchases to see where that money is really going? I can pass us a $50 purse any day, but a $12 homesteading book? A $7.99 basket to organize the pantry? Or $9.50 for those craft items? Hmmm. I'm sure I could have bought the $50 purse most of the time and come out ahead! Thankfully, I live miles from town and don't get out much!

This is my new list of cash only categories:

• clothing
• entertainment / recreation / eating out
• groceries /paper goods / toiletries
• chicken feed / other animal feed
• gardening (vegetable) / yard needs / landscape (like flowers)
• house maintenance 
• books / bible studies
• gasoline
• oil changes / vehicle upkeep
• miscellaneous (everything like stamps, office supplies, craft items, birthday gifts, etc).

I should probably break up this miscellaneous category even further! I know it's the vortex that sucks up all the extra money and if I budgeted it better, I might get a handle on it. All the categories not listed are fixed amounts that I pay like clockwork, so I'll leave them alone for now. 

Here's one miscellaneous purchase I made for myself this week that I won't regret. After using paper clips and sticky notes for the summer, I realized that if I was going to be serious about this cash thing, I'd need to be armed with the right tool - an envelop wallet. Yes, there is such an item, like this cute little red thing Dave Ramsey sells that cost me around $16.50, shipped and out the door (somehow I must have hit a sale!). 

Now, I know that I could have used something even cheaper, like some real paper envelopes from the dollar store, but I'm talking about a lifestyle change here, not just a " "I'll stick my toe in the water and see if the temperature suits me" kind of a deal. No, this calls for an all out commitment; a sink or swim scenario; a "give it all you got" hit to the old check book and credit cards. Yep, I think it's the only way to deal a final death blow to a runaway budget. Like I mentioned in another post a while back, I may have a degree in Consumer Economics, but it's another thing to practice it in every single area of your life! 

So, I guess this post is part confession, part hold me accountable, and part "Won't you join me?" And I certainly hope you "cash-only" veterans will chime in with your 2 cents worth of tips in making this thing work!


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