Author Topic: Did an all cash system help you?  (Read 2969 times)

Displaced

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Did an all cash system help you?
« on: February 22, 2013, 07:48:00 PM »
I'm recently returning to frugality after a few years of stupidity and self justification.  I'm going over finances from the last year and averaging costs per month.  They are quite scary!  I'm a target and amazon addict I think, and our food budget is ... Too embarrassing to post.  I'm wondering if anyone has used an all cash system (similar to Gail Vaz-Oxlade-sp?) to help curb expenses.  We use debit for everything so I can track easier but I think it just makes it easier to spend. 
Also, any experience with a cash system like this helping to curb a spouse's spending too?  I noticed DH has a lot of gas shop and fast food bills that may diminish if there's no cash.
Thanks for your advice.

clutchy

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Re: Did an all cash system help you?
« Reply #1 on: February 22, 2013, 08:24:54 PM »
my wife basically didn't comply with the plan we implemented.

so instead of just using cash she'd use her debit card, hang onto the cash and then spend it later... super.


So yeah, we worked out a different system that basically just auto transfers funds out of the account on specified days to a savings account that we don't really have quick access to and then if there's no money left... well it hasn't happened yet but that's the threat.

I wish you luck because it's supposed to be great.

c

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Re: Did an all cash system help you?
« Reply #2 on: February 22, 2013, 08:40:17 PM »
Cash doesn't work for me, it's too easy to spend, especially for small purchases. It's really hard to keep track of and too much money was leaking. Spouse is terrible with it. We're on a super strict budget right now and I've asked him not to spend any cash at all, which has made a massive difference.

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James

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Re: Did an all cash system help you?
« Reply #3 on: February 22, 2013, 08:42:57 PM »
An all cash system certainly has some great strengths to it, we did have cash envelopes as a budget over a decade ago, I think it worked ok despite our cheating.  It does take buy-in as Clutchy noticed, freeze the debit and credit cards in ice or whatever it takes to make the two of you stick to whatever system you choose.  Remember that habits die HARD.  Just because you have to take draconian measures to start with doesn't mean you have character flaws of similar proportions, and it doesn't mean you will need to live like that forever.  It often just means you need to take a few months to build new habits, and the draconian measures can be helpful.  Best advice I can give is to actually think and discuss your routines and purchases together, and come to some agreement about what they should be.  Then figure out what it will take to produce that.  From your descriptions it certainly sounds like a budget is needed, and it also sounds like you need to keep track of every dime for a while and see how much you are losing to fast food, convenience stores, amazon, target, etc.  Just putting a number on it every month and shaming yourselves by reviewing it together can make a huge difference.


Like c said I don't like to use much cash because I don't keep track of it as well, but a good system of keeping track of cash purchases would take care of that.
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califoreigner

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Re: Did an all cash system help you?
« Reply #4 on: February 22, 2013, 08:45:32 PM »
I tried to implement a cash-only policy for groceries to get a better handle on these expenses.  My intent was to keep a fixed amount of cash in an envelope each month and only allow myself the money in the envelope for my groceries.  Unfortunately the system broke down quickly.  Perhaps I'm not disciplined enough, but it was difficult with my wife and me going to the grocery store separately.  The other problem is that cash is so much more difficult to track if you want to automatically log where your money is going with something like Quicken or Mint.  So I've gone back to the credit card... though I haven't fixed my grocery spending problem yet!

anastrophe

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Re: Did an all cash system help you?
« Reply #5 on: February 23, 2013, 08:23:26 AM »
I did an all-cash system and it worked very well. Though I only did it for groceries, more categories might be more complicated.

1. Cash goes in envelope with ATM receipt to show how much was withdrawn
2. Spend cash, put receipts in envelope.
3. Reconcile receipts by hand at the end of the week/month/whatever
4. Enter amounts into software.

It's a pain, but it definitely made me more conscious of my spending. I think I did it for six months, and then I was basically cured and could go back to the debit card responsibly.

arebelspy

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Re: Did an all cash system help you?
« Reply #6 on: February 23, 2013, 09:12:02 AM »
I hate cash, because it's annoying to deal with and annoying to track spending.

But my wife and I also have no issues with spending control.  I can see how it would be useful for some.
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MsSindy

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Re: Did an all cash system help you?
« Reply #7 on: February 23, 2013, 09:52:35 AM »
We tried to do the cash in the envelope for groceries and it didn't work, mostly because hubby would go in there and take cash for 'something'.  I find it much easier to use the debit card and then record it in my old fashioned check register and put an 'F' by it for food.  Then, when it's the 3rd week in the month (and maybe I haven't transferred everything to my spreadsheet), I can quickly look at all the 'Fs' for the month and find out how much food budget I have left.  That being said, we also allow for a little cash $10/week for each of us that comes out of the Food budget and we can spend on whatever we want.

Whatever 'system' you go for, make sure you have buy-in and enough flexibility built in so your semi-reluctant SO doesn't feel like "this totally sucks".... you can always tighten up as you get use to the system.

Spartana

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Re: Did an all cash system help you?
« Reply #8 on: February 23, 2013, 12:37:21 PM »
I use cash for everything - all the time - with one exception, travel. In that case I will use a CC fro flights, car rentals and hotels but cash for everything else.  It stops me from impulse buys - especially if I leave the CC, debit card or checkbook in the car and only take in the amount of cash I'm willing to spend and no more. Don't want to spend more than $5 in the market, don't bring in more than $5 when you go in. Can't spend more if you don't have it on you to spend!  I use cash rather then a CC - even ifg they get paid in full each month and I never pay interest - as well as instead of a debit card or check book. With those you have access to the total amount of money in your bank account, therefore you can still spend a larger sum then you want because nothing is stopping you from accessing that full amount. With cash you can't do that if ytou only have limited cash available. And with a cash only policy you can't impulsively buy anything online. Give you time to step back and evaluate a purchase before m,aking the decsion to buy. Usually 99% of time you won't really want that thing anyways.  YMMV but this is my .02 cents (in cash of course :-)!)

I don't do the envelope system as I no longer track, Just take out cash at the beginning of the month and put some in my wallet everyday and use that.
« Last Edit: February 23, 2013, 12:40:09 PM by Spartana »

unplugged

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Re: Did an all cash system help you?
« Reply #9 on: February 23, 2013, 12:52:36 PM »
I did not work for us. We do the opposite and never carry cash.  I dislike spending money unless something is planned for so this works for us.
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mushroom

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Re: Did an all cash system help you?
« Reply #10 on: February 23, 2013, 01:15:26 PM »
If you have a problem with Amazon, you may find it helpful to get rid of ways that make it too easy to buy on Amazon.

Remove one-click buying.
Remove any stored information so you have to input everything (address, credit card info) manually every time you want to buy something.
Don't store anything in an Amazon wish list or shopping cart.

Nudelkopf

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Re: Did an all cash system help you?
« Reply #11 on: February 23, 2013, 04:14:33 PM »
I use cash for all my weekly/fortnightly things - rent, groceries, social, and transport. Works pretty well for me. And then I use my card for all the other things that aren't frequent.

happy

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Re: Did an all cash system help you?
« Reply #12 on: February 23, 2013, 05:41:31 PM »
I did a cash in an envelope system for my predictable weekly expenses, but it didn't work well.

I had 1 envelope for each weekly expense. First problem, never having the right bills/change to put the right amount in each envelope. Second problem, things that were roughly weekly like petrol, turned out to be more irregular than I thought. So after a few months I just took out the total weekly amount each week and kept the excess each week in 1 envelope for events such as stockpiling a bargain. Then the stash would get raided in an "emergency"....

Now I just draw out the cash, carry it.. use it for the weekly items. I know what I need for these items predictably now, so I rarely build up excess. I went back to using plastic for petrol.



johnnylighthouse

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Re: Did an all cash system help you?
« Reply #13 on: February 24, 2013, 01:00:59 PM »
My wife and I recently went all cash for routine in person transactions.   I've read that in general people are more adverse to spending cash as its more tangible.  Seems to be true for me. I wasn't always too profligate before, but using cash has been helping me reduce superfluous purchases.

Displaced

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Re: Did an all cash system help you?
« Reply #14 on: February 24, 2013, 05:53:26 PM »
Thanks for all these great tips!  It sounds like using cash may be a PITA but possibly quite effective.  I think I will try it if our "don't spend so much money" plan does not work the next week or two.  And thanks for the amazon tips!

Jill the Pill

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Re: Did an all cash system help you?
« Reply #15 on: February 24, 2013, 06:15:47 PM »
Quote
Don't store anything in an Amazon wish list or shopping cart.

Gee, mushroom, sticking things on the wish-list is how I broke my Amazon habit.  I realized I was tempted to buy things just so I wouldn't lose track of them.  Now, I even take photos of bookstore books I might want to read from the library later.  But often, I find my interest fades -- and would have if I'd bought them! 


Iron Mike Sharpe

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Re: Did an all cash system help you?
« Reply #16 on: February 24, 2013, 06:21:02 PM »
My spending started going down dramatically once I started budgeting everything out using the YNAB system (You Need A Budget).  I give every dollar a job assignment to do, be it spending/future spending, saving and investing.  If I want/need something, I check my budget levels to see if I can actually get it.  But now that I'm trying to ramp up my investments and trying to live more frugally, I am finding I don't really even need/want things anymore.  So, my saving/investing rate is continuing to climb.

Parkertom

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Re: Did an all cash system help you?
« Reply #17 on: February 24, 2013, 07:33:06 PM »
We went all cash at first while only using the card for gas. Now we are in a hybrid where we use the card to leverage rebates and cash for our minimal discretionary purchases like dinner out or incidentals.

jpo

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Re: Did an all cash system help you?
« Reply #18 on: February 25, 2013, 07:42:35 AM »
I used to use cash (no "system") for most things, but now I agree with ars and use my credit card for just about everything:
I hate cash, because it's annoying to deal with and annoying to track spending.

But my wife and I also have no issues with spending control.  I can see how it would be useful for some.
Also no issues with spending control, despite the studies.

onemorebike

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Re: Did an all cash system help you?
« Reply #19 on: February 25, 2013, 09:02:49 AM »
I have the same system as below. We have many relatively fixed costs, that we use cards on to gain $$ money back, easily track, and automate - we use cash envelopes for what I refer to as our "slush fund" that includes four envelopes: individual discretionary spending x2 , date night spending and alcohol. We used to do alcohol and eating out on a card and those numbers were troublesome, like you mentioned with groceries. Adding envelopes for these categories cleared up that problem.

These are our problem spending areas and creating an envelope system very clearly sets limits on what we can spend in those categories each month.

We went all cash at first while only using the card for gas. Now we are in a hybrid where we use the card to leverage rebates and cash for our minimal discretionary purchases like dinner out or incidentals.

chatsc

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Re: Did an all cash system help you?
« Reply #20 on: February 25, 2013, 10:39:43 AM »
it didnt work for us either.  I tried, but i would always forget the cash when i went out.  or i would bring the money for groceries, but then see that gas was a good price, but didnt have the cash for gas on me.  it made things way more complicated than they need to be.

i keep a daily tally of how much money we have in a certain pay period. ie:  after all the bills/savings accouints in the next 2 weeks are paid, we have 475$ for gas, groceries and other stuff.  if i spend 100$ on groceries, I write it down and then we have 375$ until next pay day.  we have to make it work.  sometimes we have more money, sometimes we have less. 

i dont use mint or anything like that.  I need to see it and write it myself to remember and for it actually to mean anything.

AJ

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Re: Did an all cash system help you?
« Reply #21 on: February 25, 2013, 10:49:47 AM »
Cash works really well for us, but we found there was a few months adjustment period transitioning from cards to cash. At first, it just felt like monopoly play money, it didn't feel real so we spent it faster. You have to  have the discipline to not run back to cards when the cash runs out. Once you get it stuck in your mind that this is all you have and no more, it is a very effective budgeting system - especially for creating the "artificial scarcity" a la Millionaire Next Door.

Paul der Krake

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Re: Did an all cash system help you?
« Reply #22 on: February 25, 2013, 11:06:09 AM »
The only time I use cash is when going out to the bars, and I leave my plastic at home. My self-restraint tends to fly out of the window after a few drinks so I find it best to have a hard limit that I cannot go above.
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GuitarStv

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Re: Did an all cash system help you?
« Reply #23 on: February 25, 2013, 11:28:52 AM »
I used cash three times last year, for a total of about 120$.  Kicked myself each time.  I make a percentage back every time that I use my credit card, and pay it off each month in full.  Why would you rob yourself of that money by going to a cash system?

onemorebike

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Re: Did an all cash system help you?
« Reply #24 on: February 25, 2013, 11:45:25 AM »
GuitarStv, this is why: http://articles.chicagotribune.com/2011-12-15/news/sc-cons-1215-karpspend-20111210_1_credit-cards-card-balances-debit-cards

I used cash three times last year, for a total of about 120$.  Kicked myself each time.  I make a percentage back every time that I use my credit card, and pay it off each month in full.  Why would you rob yourself of that money by going to a cash system?

layzbones

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Re: Did an all cash system help you?
« Reply #25 on: February 25, 2013, 07:06:27 PM »
I use a cash system for my everyday spending (food, entertainment and misc.) and for me it's essential.  I lose track of things when I use my card, but hope to have the discipline to track it and manage it better soon.  For me it hurts to spend cash.  I Take out XXX amount every time I get paid and it feels good to have that wad of cash in my pocket.  Every time I spend it i know it's chipping away at that wad. 

I'm coming off of a pretty bad spending addition and I use my cash system as motivation to save and further reduce spending.  I've gotten my cash budgeted items down a good bit from where they were, to where it's just a bit of a challenge to meet the budget.  I give myself a reward that what ever is left over in cash each budget session I get to keep and save towards anything that I want (something I normally wouldn't spend on).  That way it encourages me to keep my budgeted items lower than I have budgeted for and keeps me working just a bit harder than I would.  For me it's win/win.

but I can see why it wouldn't work for everyone - that's just my case, and it will hopefully only be temporary until this kind of spending just becomes a way of life.
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ScienceRules

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Re: Did an all cash system help you?
« Reply #26 on: February 26, 2013, 03:00:28 AM »
I am on an all cash system right now by necessity (I'm living in Denmark and no takes my swipe/signature credit card). I've found it really helps. I only brought $4500 with me and I have to make it last 6 months (including rent) so there is no splurging. While my example might be a little extreme, I would say to make a cash system work make sure that you only take the amount you are willing spend with you. Every week I am allowed $40 for everything and since I know that's all I have there is no way to spend more and most weeks I end saving 25-50% of it. When I was home in the states for a couple weeks, I had a lot more cash with me on a trip to costco because "there is no way to leave costco without spending $200". So even though I only had about $70 of things on my list, I spent about $180. So it can work, but you just have to be careful about. Cheers!

mushroom

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Re: Did an all cash system help you?
« Reply #27 on: February 26, 2013, 07:41:12 AM »
@JillthePill: I hear what you're saying, but I still think it's much better to keep a "wish list" elsewhere, whether on paper, Evernote, a word doc, or whatever. If it's just sitting in your Amazon account, it's way too easy to have a moment of weakness and buy the items in there - plus you are more likely to visit Amazon more frequently to put the items into the list/cart and also get advertised to more sneakily about items you might like. If you keep your wish list elsewhere, you don't have to visit Amazon to add to it, and you have to add your items manually if you finally decide to buy them.

mustache brony

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Re: Did an all cash system help you?
« Reply #28 on: February 28, 2013, 12:51:17 PM »
I used to use a cash system for eating out and other "fun" purchases. Now I do everything by card (when I can) and only use cash for when I'm splitting bills or making change. I find the rewards are more "fun" and not spending money even more fun.

mm31

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Re: Did an all cash system help you?
« Reply #29 on: March 01, 2013, 11:34:30 AM »
I use a cash system for groceries only, and only during the summer/fall. The reason is because I buy fruits and veggies in farmers' market during that period. The prices there are very fair (often cheaper) and you can't beat the freshness

Cecil

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Re: Did an all cash system help you?
« Reply #30 on: March 06, 2013, 12:27:19 AM »
GuitarStv, this is why: http://articles.chicagotribune.com/2011-12-15/news/sc-cons-1215-karpspend-20111210_1_credit-cards-card-balances-debit-cards

I used cash three times last year, for a total of about 120$.  Kicked myself each time.  I make a percentage back every time that I use my credit card, and pay it off each month in full.  Why would you rob yourself of that money by going to a cash system?

That's funny, I actually find using a credit card to be more painful than cash. I've used a card pretty much exclusively since I was 16, and have never paid for things with cash on a regular basis.

In my mind, cash is play money. It feels like I'm cheating the system by getting stuff with pieces of worthless paper. But when I have to put my card in the reader and it says $300? OW OW OW.

So yeah. Cash is really hard to track and credit cards give you cash back!

projekt

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Re: Did an all cash system help you?
« Reply #31 on: March 06, 2013, 07:32:15 AM »
I use a program called "Budget" on the mac which, I think, gives me the benefits of a cash-based system without the hassle. It is an envelope-based system, so when you are planning to do something, you check to see if there is enough in the envelope. Things get automatically allocated when you record your paychecks and you can also allocate deposits when they occur. I've found it really good for keeping on top of monthly expenses when you have a biweekly paycheck. It requires a little more "touch" than Mint, but on the other hand, I find "spending limit" budgeting to be less than useless. Envelope budgeting is the way to go.

http://www.snowmintcs.com/products/budgetmac/

Dynasty

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Re: Did an all cash system help you?
« Reply #32 on: March 06, 2013, 03:59:00 PM »
I started a cash and two envelope system. It works really well.

Basically as of now, I've allowed myself 900 dollars spending money per month.

Money goes in one envelope. From envelope to wallet for everything from gas to groceries, to haircuts, to oil changes. 99% of normal day to day purchases.

If I make a credit card purchase for something online, that money will go into the second envelope.

Then at the beginning of the next month, if I had spent 100 on credit card purchases, that money is already accounted for in the second envelope.

Then, I'll subtract that 100 from the 900 I'm allocated for the new month. So then I'd only be pulling out 800 from the bank.

For example last month, I spent 160 on my cc. And I had 60 dollars left over from my 900 starting balance. Subtract 160 from 900. And I can pull out 740 from the ATM, and add back in the $160 from the cc envelope. End result, 960
dollars for the month.  And no surprises with a huge credit card bill. Already accounted for in the budget.

Hoping to have at least 100 left over this month, and no credit card purchases.




libraryjoy

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Re: Did an all cash system help you?
« Reply #33 on: March 13, 2013, 07:10:40 PM »
We're doing all-cash right now!

The jars are cute and decorated, and we spend the money together which really helps the "no cheating".

We each have envelopes with our own discretionary funds. That way you can still have a little bit of mad money!

So far it's working out, and at the least it's making us more aware of our former shopping habits, and hopefully creates some new ones.

johnnylighthouse

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Re: Did an all cash system help you?
« Reply #34 on: March 14, 2013, 09:21:25 PM »
I started a cash and two envelope system. It works really well.

That's what I've been doing too.  We have two incomes though, so we cash my wife's paychecks for local purchases and direct deposit mine for bills and savings.   Once we build up a set amount of cash savings in the second envelope we deposit the next paycheck and start over.  The bank is on the walking route to the grocery store which helps.