Becoming Debt Free in 2009

January 8, 2009

The Cash Plan and How It Is Working

Filed under: Budget,Cash Only,Dave Ramsey — ambercouric @ 10:56 am
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I thought I would update my cash only plan.  I started a few days before the new year.  So I have used it a little more than a week.  Not really long enough to know that it will work forever but long enough to get a “feel” for it.

The first thing I did was to give $20 to Kennedy.  I told him that anything he needed was to come out of that so I would not be giving him a dollar for this and a dollar for that.  This has worked extremely well.  All the little “needs” for this or that have pretty much dried up.  For example, he needed new art pencils.  He has 7 days left in art.  It is not the end of the world if he doesn’t have new art pencils.  He has every color just some have been sharpened down lower than he likes.  He chose not to spend the $7.99 on new pencils because he would have to pay.  If nothing else works just this one thing is worth it.  He still gets a regular allowance so he just feels like he got a big raise.

The second thing is that I am more conscious in the grocery store.  I picked up a bag of chips that were $5.99 and walked around the store.  Then before making it to the checkout put them back and picked up a 99 cent snack.  (Yeah, I could have save more not buying any snack but a girl has got to live a little.)

Paying for gas with cash wasn’t as bad as I thought.  In the mornings, the cash station has an outside attendant that you pay so I don’t actually have to go into the store.  The gas is a couple of extra cents a gallon  but not more than 25 -50 cents per fill up.  Well worth the convenience. I only fill up twice a month ususally so I pay about $1 month for this.

Cons – I don’t have the security of the debit card in case I go over.  I knew that if I kept the debit card in my wallet I would use it. 

How is the cash system working for those of you using it?

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10 Comments »

  1. You’re making me hungry for a snack of chips now…

    I like the idea of giving an allowance to kids because then they make decisions rather than going to you like a bank machine LOL!

    Wish my parents did that with me.

    Fabulously Broke in the City
    Just a girl trying to find a balance between being a Shopaholic and a Saver…

    Comment by Fabulously Broke — January 8, 2009 @ 12:46 pm

  2. It works well for me. I’ve been on the cash system about a year now. The one pitfall I have is the grocery store! If I do not carry cash with me to the store, I blow it everytime!! After months of doing good, I thought I was savvy enough to break out the old debit card again, well, that was a relapse to say the least. I blogged about it here: http://mymoneychat.blogspot.com/2008/12/budget-buster.html.

    Comment by Ms. MoneyChat — January 8, 2009 @ 1:37 pm

  3. Do you pay extra for petrol when you pay in cash? How bizarre! Or is it because you have full service from the attendant rather than pumping it yourself?

    Comment by debtdieter — January 8, 2009 @ 3:33 pm

  4. We’ve been on cash only since mid-July and it is going extremely well. I made sure when I budgeted that there was some padding left in our chequing account, that way if I go over I can still use my debit for the extra. I try to make up the extra the following week in the budget, but don’t have to stress about it too much.
    Good idea on the extra “allowance” for your kids, it will really help them form good spending habits.d

    Comment by MakingUpForPastMistakes — January 8, 2009 @ 4:17 pm

  5. Great job! I love being on the cash system so far. I have come close a few times with not having enough, but have thankfully squeaked by! Hope it continues to work for you & is a positive move 😛

    Comment by jpkittie — January 9, 2009 @ 8:05 am

  6. My cash system is working fine-I do think more about my purchases now though, haha!

    Comment by sharon rose — January 9, 2009 @ 11:25 am

  7. It’s going well… I’ve actually cut back on the number of envelopes I fund exclusively with cash. I’m currently only doing food, gas, and clothing. Other things that I used to only fund with cash (like entertainment) I’ve started just using my Mvelopes to monitor it, and then if I’m going to the movies or something of that nature, I’ll take out only what I need in cash before going that way I can still control my spending better and still have a little left for use with my debit card in case I can’t purchase something with cash. So far, so good – and the cash really does make me think before spending – ESPECIALLY with food!

    Comment by Deb — January 10, 2009 @ 8:51 pm

  8. Hello! I abandoned the cash ship after only ten days. The motive began when I kept my gas money in my chequing account – because I usually have a two-year-old strapped in the car I almost always pay at the pump. the one gas station that had an attendant is now closed, so I can’t just hand my cash through the car window anymore 😦

    Then I got nervous about having all that cash in my apartment, just in case, you know? So I deposited it back into my account and I’m now going to transfer over only what I need for that week. Let’s hope this works.

    Comment by Karissa — January 11, 2009 @ 3:35 pm

  9. Feels weird to be commenting in a blog that is ending, but here I go:

    The cash only envelope thing works great for me. I use Fun, Food, and Gas envelopes because those are the only things that I would normally overspend on week to week.

    I keep a fourth envelope that I call “Visa” because actually now that I’ve gotten the hang of the cash system I do go to the cash envelope to make sure there’s money there, then use the Visa to run the transaction. When I’m in the car after filling up I take the cash from my cash envelope and put it in the Visa envelope.

    That way I know I’m within my budget and the Visa stuff has cash allocated to pay for it.

    I do this at the grocery store too. Keep the spending under the cash limit, pay for it with Visa, then take the cash from the Food budget and put it in the Visa envelope.

    I find the most important thing is to think of the cash envelopes as the primary means of payment, meaning if there isn’t cash you don’t buy. If there is cash, you can use the c.c. for the amount but take the equivalent (roughly-within a dollar) of cash from the respective envelope and put it in the Visa envelope.

    That money in the Visa envelope is not used for spending. It is either redeposited to my bank account (which is where I pay the Visa bill from) or I just let it accumulate for a while. Sometimes at the beginning of a new month I have enough cash in there that I can restock all my budget envelopes for the new month from it.

    Comment by Steve in W MA — September 19, 2009 @ 10:47 pm

  10. I will make one more comment that using the cash envelope system is so much more effective than other methods of disciplining myself budgetarily that they fall to the wayside in comparison.

    My budget is like an iron clad ship with the cash envelopes. Without them it’s a leaky leaky raft.

    It’s a pretty impressive difference. Counting my ongoing debt payments as savings, I am successfully, and without real strain, saving about half of my income using the cash system.

    Comment by Steve in W MA — September 19, 2009 @ 10:53 pm


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