Cash Works for Me

I have spent 9 days without my debit card. Other than the occasional twitch I get when a Google search turns up hits on Amazon.com, I feel much better.

For years, I've wandered around in the misconception that a debit card is the same as using cash. On the surface, it basically is the same as cash. A debit card represents what you have in the bank, though there might be a slight drag between purchases and the account updating. A debit card is definitely NOT a credit card. However, spending with a debit card is psychologically different than spending with cash. Studies show that people spend more when they use ANY type of plastic. There's something magical about holding a $20 bill in my hand and knowing that it's going away that makes me want to hold onto it a little more. I'm more frugal with cash.

For what it's worth, I don't want to be a tightwad. I've never been that way. In fact, I've been pretty much the opposite, not really one to have a budget or a plan for my money. Buzz and I have been financially blessed that despite our erratic spending, we haven't completely gone under. We still have shelter, food, and fun. But, we realize that we haven't been honorable in our spending patterns. The solution for us to move to a cash-only plan. Buzz and I have moved to a cash-only plan for almost all of our spending. We still pay our bills online, and when we do order something online, we have to use something other than cash.

But, how do you manage cash? Our budget allows for about $880 a month in spending for things like groceries, gas, household items, baby items, cosmetics, professional services, and so on. Do I just stuff $880 into my purse and carry on?

Our financial advisor, a wonderful woman named Sharee, swears by the old-fashioned envelope system. It's similar to what people of yesteryear used to do with coffee tins and mason jars. They'd keep money in them and take the money out only when the items were needed. Now, Buzz and I have a stack of envelopes where we divide the cash into the categories it's meant for and we take the cash out when we need it. We take to the store what we're committed to spending and no more. The goal is to actually have some money left over in the envelopes at the end of the month.

The result? I'm thinking more about our groceries. We're planning shopping trips instead of just heading off to Ikea or Sam's. Some unexpected benefits so far?Along with saving money, we're saving tons of time! I'm shocked at how much time I was really spending in stores. We're also wasting less. I read in a recent Reader's Digest article that the typical American wastes 12 percent of the food they buy at the grocery store. I'm sad to say that our family was probably way above that mark. But, we're making changes. I've started taking time to go through my freezer and fridge before settling on a menu plan for the week.

It hasn't been easy. We said just last night that we can't believe it's only been 9 days. It takes 90 days to change a habit, though, and we're working hard to make it through our 90 days. We want to spend less, and using cash works for us.