I hate to admit it, but we’ve been spending more money than usual. We’re still bringing in more money than we spend, but we don’t want to let this get any worse before I get my big raise in August.
I brought up the subject of cash budgeting for our fun money to the boy the other day, and he thought it was a GREAT idea. We rely on our debit and credit cards too much.
We swipe our cards for nearly every purchase. We just never carry cash, it’s that plain and simple. We have no credit card debt, so that’s not what I’m worried about, I’m just worried about our spending getting out of control.
And yes, I do realize that we are not doing a full cash budget, this is mainly just for food and fun money.
The reason why we need this is because we tend to go overboard when we do spend money. If we go out with friends, we will nearly always buy too much. A round of shots, buckets, etc, and that adds up. With having only cash, we will definitely have to limit ourselves.
We’ve decided that we will each get $40 a week as our “allowance.” We can spend this on whatever we want. Now, our groceries will still be budgeted, and will not come out of this $40 a week that we get. And at certain times, we will still buy things we “need” such as clothes etc (and this will not always come out of our fun money), but if we want quick food, a drink (soda, alcohol, etc), something at the last second, clothes we don’t exactly need, then it comes out of this $40 a week.
Also, I will not be switching to cash for groceries, but I will limit ourselves to a strict $250 a month for groceries. I think this is possible considering that we’re getting $320 for our “fun money” every month.
Our rules for our fun money cash budget:
$40 a week. Gas, groceries, bills, and the like don’t count, because then $40 would not be enough of course. The $40 for each person can go to whatever they like. Build it up and buy something big, or buy lots of little things. This way we don’t need to ask the other before we purchase because it’s each person’s own money.
When you run out, you’re out of luck. So there is no “I will take this out of next weeks money.” This is because we all know that this is a never ending cycle and this will continually be said.
Money will be given each week, not per month. This is so that we don’t get ahead of ourselves. If we only have $40 in our purse/wallet, then we will feel much differently about how we spend money instead of having $160 each in our wallets for fun money.
I think this will work for many reasons. If I realize that I only have $40 to last me a whole week, then I will be more frugal with my choices. Now, we won’t be doing this forever, but we will do this until we feel like we have a better control on our unnecessary purchases.
I also won’t feel as bad when I spend money. It’s all my fun money anyways, so who cares how I spend it!
The only downside that I can think of for this is that we won’t be earning points on our purchases, but that’s all right. We will still be getting points from our monthly bills which generate significantly more in points.
Do you have a cash budget? How does it work for you?