Several years ago, I read a Dave Ramsey book in which he expressed the importance in paying for everything in cash, or at least with a debit card. He doesn't believe that you should charge anything to a credit card. We put a lot of Dave Ramsey's ideas into practice, but I just couldn't accept the whole paying in cash thing.
That is until a couple of months ago when I cut my grocery budget from $600/month to $300/month for our family of five. Then I knew that I would have to pay in cash to resist the temptation to buy something that wasn't on my list. The credit card made it too easy to spend over my allotted budget. I knew that I had the money in our checking account to pay off the credit card bill, so I would buy more than what I absolutely needed. But the problem was that I was buying unnecessary items when the money could be used in other necessary purchases or put back into our savings account or used to pay down our mortgage.
Now that I've been paying in cash, I've been extra careful to stick within my budget because, frankly, it would be really embarrassing to get to the checkout counter and not have enough money to pay my bill. Yeck. That thought alone scares me enough to remain very conscience of what I put into my grocery cart.
So each time Brad gets paid, I go to the bank and take out $150.00 for groceries, $25.00 for cleaning/toiletries, and whatever money I have allotted for "extra" things such as a last minute pizza-delivery. The extra category is determined by whether or not I know that there are upcoming things that will require a little extra money such as a youth group activity for Sergei or a homeschooling field trip. I then put the money into envelopes marked with their appropriate categories.
I'm in the process of making fabric envelopes for this purpose using this tutorial as they will be so much prettier and so much more durable for this purpose. This is not necessary, however, and I'm just using fabric I have in my fabric stash to complete this project. Here's also a link to make a really pretty scrapbook paper cash envelope system. Looks like an easy project; it just wouldn't be as durable as fabric envelopes.
Then when I pay for my groceries, I take the money from the corresponding envelope to pay for those items. And once I run out of money, it's done until the next paycheck. Now, I do have extra money I could use if there is a food emergency such as house guests or something like that, but I don't want to do that on a regular basis as that would defeat the purpose of a budget.
Paying in cash along with meal-planning have been the two biggest money-savers for our family. In fact, I'm kicking myself for not having started these two things earlier in our married life. All the money I could have saved our family!
Next time I'll be discussing another money-saver known as a price-comparison tablet. This is yet another tip I had heard about over and over but never wanted to invest the time in establishing. Now that I have one set up, I realize what a helpful, money-saving tool it really is! Have a blessed day!