Cash in hand is cash to spend! That is a motto that my husband and I have taken on over the past couple of years. What I mean by that is the only money outside of our monthly bills (car payment, student loans, cell phones, giving, etc.) that we spend is cash that we can actually see and feel. Some of you may recognize this as a Dave Ramsey trick of the trade...I cannot tell a lie! We were inspired to try this and it has worked really well at keeping us on track financially!
Here is what you do:
1) Look at your budget and distinguish all expenditures that you physically make such as gas, groceries, going out to eat, personal care items, clothing, etc...
2) Proceed to local ATM and remove the budgeted cash for those things.
Note to self: DO NOT take any more money out of the ATM than you need.
3) Place money in an organizer with envelopes that outline the money’s use. Check out these super cute "cash only" organizers at 1000 markets!
4) Spend your cash! Only on what you need of course!
The cash only method has done wonders to help us monitor how much we spend and to help us not exceed our budget. For instance I know exactly how much I can spend on groceries which makes me more selective about what I buy. It helps me to distinguish wants from needs and also helps me to figure out when parts of our budget might need to be increased or decreased because of inflation. Can you say practical? This method forces you to be conscious of where your money is going which ultimately saves you money!
Our family started this a couple of months ago. I am amazed at how much money we are saving!
ReplyDeleteWe started the baby steps about a year ago and we are almost done with the 6 months of emergency expenses step #3. Thanks!
Thanks so much for the link with the cute organizers! We have been Dave-Ramsey-heads for a few years now, but I still have the old fake leather wallet you get when you sign up. I can't wait to get my new cute wallet! :)
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