Simple Sunday
After two months the other powers to be at Happy to be at Home decided to let me write a simplicity post. Actually I am quite surprised, since my life is extremely complicated. After reading all the great Simple Sunday posts, I was a bit stumped on what I should write about. Then I remembered one way we have really simplified our lives. We are on a cash only budget.
We had always been a credit card family. For the past several years we used our credit card to pay for everything, from groceries to gas to the phone bill. We paid it off every month and earned cash back at the end of the year. Although I thought this was simplifying my life, it really made it much more complicated. It was hard to figure out how much we were spending on certain things every month because the credit card payment was usually due the month after you spent the money. Sometimes I would have surprises on the bill because my husband would have charged many extras the month before and didn’t tell me about it, or the receipt was lost. It was very stressful trying to reconcile our purchases, categorize them, and create a budget when we had our credit cards.
One year ago this week we switched to a cash only budget. At the beginning of the month we create a budget and then withdraw money to fill envelopes for each category in our budget. As a side note, we pay all of our bills, utilities, insurance, rent, etc online so we don’t need cash for those categories. When we need to buy groceries, get a haircut, or eat out we take money out of the correct envelope. Now there are no surprises at the end of the month. There is a ledger on each envelope to keep track of spending. The goal is to make this money last until the end of the month. If the “eat out” envelope is empty, that means I am cooking for the rest of the month. It is really quite simple.
When a new month begins we start the process over. This has simplified our lives tremendously. There is no arguing over lost receipts or unknown charges. The best part of our cash budget is that is allowed us to pay off our student loan debt and now we are completely debt free.
My life can be very complicated, but I keep my finances simple.
AUTHOR | Toni
Toni, one of the original 3 Moms, is a military wife and stay-at-home(schooling) mom of six, soon to be seven great kids. On her personal blog, The Happy Housewife, she writes about saving money, healthy eating, recycling, homeschooling, life as a mom, and crafting.
Thanks for sharing. Currently I pay using one C/C that I pay off several times a month. It is true that you do spend more that way so I was thinking of switching to a cash system. I worked as a credit counsellor so I saw what credit does to people. Good for you and your family to go this route and prevent that mess. I may have to dust my envelopes off….