We’ve never been “good with money.” We always felt like were against a wall, were always making up lame excuses for our spending, and felt so trapped we would spend money before we even had it. We never had a savings account and we ignored the tools in our bank account that let us know how much we spent eating out, or at target on completely unnecessary things.
Then we decided to take a chance and try something different. A cash envelope system! We had tried it once in the past, but only for one pay period, and we were still in the thick of telling ourselves little lies to make us feel better about our excessive spending, we simply didn’t have the determination that was needed until a month ago.
I knew something had to change, it just never made sense that on paper our budget looked pretty good. It never made sense how I would shop sales and try to plan every grocery trip and still we would be over by hundreds of dollars every month! It never made sense that a week after payday we were flat broke. We had become used to over spending and maxing out credit cards all year long and then paying them back off each tax season.
Then this tax year happened and we didn’t receive a refund. At. All. (we’re still in the process of working this out and it’s a long story, but it’s not finished yet.)
Left with no other option, I sat down while my husband was eating his lunch one day, and presented what felt like our best option. A different way to budget.
I manage what bills get paid when and the meal planning, so it was only natural for me to direct the cash flow also. Currently every two weeks our cash budget looks like this:
$80- Gas (between husbands car and mine)
$120- Fun ($60 for each of us to buy whatever we feel like buying)
$20- Kids (allowance/activities/buying new XBOX cords because they keep breaking them)
$60- Eating out as a family once or twice over the two week period
Every pay day I go to the bank and get out this amount of money. I prefer to have it all in $20’s so that I can just go to the ATM. We keep all the money for bills in our regular account, have a separate account for anything house related, and the rest goes into savings. Our savings account has a tool that allows us to set up savings goals for whatever we choose. Currently our main savings goals are for vet appointments, a new deck, an amusement park family weekend and a hunting trip for my husband in the fall.
Okay, now that it’s all broken down, let’s talk about how it’s all working for us so far:
On the first weekend in, we were already feeling the benefits of it. My husband went fishing and didn’t need to ask how much money we had, or how much he could spend, he had his cash and knew that’s what he had to spend. Being a little bit of a better spender than I am, he did really well. I however did spend most of my cash in that first weekend, by spending the day going around to various stores buying little things. After that we went out to dinner (using the eating out budget cash of course). Right there is where I felt the benefit! Usually after a day of shopping, and knowing that my husband spent some money too, I would either A. not go out to eat and stay home, even if I had promised the family a night out, or B. Spend the whole time out with my family stressed about how much we spent and worried about how much we would have left, because we were so used to over spending and draining the bank account with in a dollar of it’s life. You have to know that before this system we would have a hard time keeping $20 in savings let alone going out and having manageable fun and still putting away hundreds of dollars every pay period. So to know I was still having fun, and that we were still meeting our goals was pretty damn awesome!
It’s still hard to get used to though. The second pay period of last month I once again spent most of my cash in the first weekend, we had an unplanned eating out meal but we managed to stay in budget for the first week. We have had to pull out some extra cash this time around. I’m sure we used a few money lies to get to that point… but we’re still learning. I refused to say that since this second time was hard that we won’t go on. Because that small difficulty tells me I’m on my way to leveling up, and my savings account proves that we’re on to something. I’m hoping that by writing about it often I will be more accountable and want to prove to you that this is truly worth doing!
So, now for the big reveal part! We were able to put away over $900 this month! I still can’t believe that we were over spending by that much every month! And we weren’t having any fun over spending either! I especially can’t believe it because I really don’t feel like we deprived ourselves in March with our spending. We even ate out a little more than the average month because we could fit it in the budget. We simply took a few minutes to assign a little more specifically where we wanted our money to go (and honestly, after that first time of going through the numbers, this is really all it takes to keep up with it). We also got a little good news with getting our state refund back (so we’re still hopeful for our federal) and with that refund along with our savings from paychecks, we now have an emergency fund, my husband bought a smoker that he’s wanted for years and I was able to replace my broken faucet with a really nice one that cost more than I normally would have paid otherwise.
A few tips I’ve learned along the way:
1. Start small! When we attempted this last year, I can’t even tell you how many envelopes we started out with. When you look up this system on Youtube, you can easily find people using them for every little cash amount and it can really feel like that’s what you’re supposed to do. But I beg you, STOP! At least when you first get started! Start with the areas of the budget that you struggle with the most. The grocery budget, fun spending, eating out, go through and see where you are way over spending and use cash for that. As you get used to it and are more aware of your spending habits, then slowly add on something new every month or so. It it starts to get too complicated and you find that you can’t follow it, go though and simplify it. If a system is easy and simple, it’ll be more likely to work for you!
2. Use fails as learning points! Failure IS an option, in almost everything you do, failures only really SUCK when you don’t learn from them or you use them as a reason to quit. Take your fails and say, “Okay, this is where I went wrong.” and go from there!
3. Have some kind of incentive. Something worth saving for. Make a vision board, set it as the background on your computer/phone, put it on your bathroom mirror. This past month we picked a not so cheap incentive, but it WAS something I knew my husband would gladly try this crazy idea for. This coming month if we meet our savings goal I’m getting a Ninja Coffee Bar (on sale of course). But it can be as big or as small as you want it. A new car paid for in cash, a vacation, a dinner at your favorite restaurant, whatever floats your boat, whatever makes you put that damn debit card away and demand of yourself that you stick to your budget.
Have you tried the cash system yet? Do you have a different budgeting system that you love to use? Or are you still looking at your bank statements every month wondering where all that money goes when you thought you would have so much left over each month? Do you have any questions about how we manage our cash system? Comments are open in this post!
Until next time friends!