The idea is to take one lump sum out at the beginning of each month or week, place a percentage into envelopes or slot devoted for certain things, such as one slot for groceries, the another for entertainment, etc. You can only spend what is in that slot for that month. When it is out, it's out. If you have leftover in any slot at the end of the month, put all of that in savings.
How do you handle large purchases with this? Say you want to buy an ATV or a new bow? Also, how do you do deal with the different times of the year costing more or less depending on what is going on? Say when hunting season is more expensive to do things than in the dead of winter?
Create a savings for that. Or use what you have as long as it doesn't get into emergency and retirement funds. Sent from my SAMSUNG-SGH-I317 using Tapatalk 2
I wish I could get my wife in board with the Ramsey plan. I'm not very good at saving myself and together we are impossible.:what: Sent from my SAMSUNG-SGH-I317 using Tapatalk 2
Savings We have multiple savings accounts. Well, if you truly want to budget yourself, then you just cut back, but if not, you can go by the philosophy that some months will be less and other more, so set aside the money when it's less for those more expensive months.
I like earning rewards too and also pay my balance every month. I've earned around $1000 in rewards over the past two years. I really don't think just using cash would change my spending habits. I know I'm going to be paying for it either way?
Yeah, I like the CC rewards. We have >$1k for cash back awards right now on our CC. But if you are trying to reduce spending in certain area, using cash only makes it easier. If you are spending $800/month on dining out, and you want to limit that to $500/month, it is easier to maintain that budget if you only give yourself $500 at the beginning of the month to use, and when it is gone, it's gone. Trying to limit yourself to a fixed budget like that with a CC is a bit harder. It's just a method to assist with budgeting.
Hook, We went through FPU over 6 years ago. Haven't had a credit card since. Paid off our car, moved (taking a 58% pay cut), built up about a 10 month emergency fund, and have been debt free ever since. We started with envelopes for about half our expenses, and have slowly gone to no envelopes. The two biggest things that can ruin a couple are not knowing what you spend your money on (including how much), and not being on the same page as your spouse. Creating and tracking your $$ with a written budget fixes both of these issues. Tracking every expense for a whole month will open your eyes. At first, we had weekly "budget meetings" just to help us keep track. After a few months we were down to monthly "budget meetings". Now that we're on a roll, it's every other month. My wife is the hardcore saver, I'm the free spirited spender. But we both have the same goals and sticking to our budget gets us there. It's a pretty good feeling to walk into a car dealership and write a check for a car
I know those figures were arbitrary but I can't help but laugh at $800/month for dining out. That is over $26/day. I bet we don't spend much more than that eating out for the entire year. LOL
FYI, we have 2 savings & two checking accounts. Our main checking is what we use for most purchases. Our second checking is for small "emergencies". It basically keeps a 2K balance and is paid back from our emergency savings account. We also use that card for online purchases since it has less $$ in it (in case of fraud).
What keeps us from eating out a lot is the kids. It is not enjoyable trying to sit down and have a meal in a restaurant with a 2-3 year old. I'd rather not eat and feed them PB&J.
Yeah, having our daughter has reduced that, because honestly before, we were spending close to $1k/month on dining out. It is less now, but we still order take out too much
Our lives are very similar in some regards. 1, 3, 4, & 5 we've done in the past few months. My Tacoma has been paid off for a few years though.
Neither one of us carries more than a few dollars in cash. We each have a debit card, no credit cards at all. We pay at the bar with a check. That's about the only place we eat out. We have a budget. Everything we spend goes into Quicken on the computer immediately. We check on categories and payees every couple days to make sure we're in line. We do a 30 day report. Our budget only allows us to spend a certain amount on certain categories and payees in a 30 day period. The budget includes groceries and gas, but we have to allow for the price jumps in gas. Utilities vary by season, so we just pay whatever it is. We have no control over it. Gas for heat may be $19 a month this month (includes water heater) and $170 in the winter. We don't have smartphones, so that bill is a constant. The money we spend at the bar is the most discretionary. If we get a little over our 30 day budget, we cut back. Both our cars are paid for and we own the house free and clear. So we're able to put something aside for the future. That is basically the surplus over our budget. There doesn't seem to be any need for us to do anything out of the ordinary. Our continual scrutiny of our spending and our budget seems to take care of everything. It seems to me that what this cash method is supposed to do is enforce a budget. You can do that with Quicken or some other household finance software.
