Question Budgeting and Paying with Cash b4 Filing?

[Majakat]

I am seriously considering going all cash after we get paid on the 25th -

I would love to use the envelope system, and really for once finally get a handle on what comes in and goes out- is this a bad idea to do before we file? I am hoping to file in august - if I can make it that far without anyone suing me -

If I do go all cash, I just need to be diligent about receipts, correct?

Some auto pay stuff wont be cash like my set payment plan for gas and electric, and water - and my heloc -

Or would it be better to do just as we are and use the debit card for everything?

[SMinGA]

I think it is a good idea to try if you think it would work for you. Though I don't choose to be 'all cash'. I use my debit card. We have different bank accounts w/ debit cards, and different accounts are used for different things. My full time paychecks: money goes to pay mortgage, utilities, etc. Hubby's pay: goes for groceries, gas, etc. Having the 'bill' money apart from the 'expense' money is helpful, since if the 'expense' account is lower one week than another, we know we need to be extra careful in spending. We're not 'there' yet, but before filing I intend to use another account to setoff money for the less routine expenses. Like to move 'clothing' or 'car maintenance' money if we don't use our budget one month, so its waiting down the road when we need it.

Personally, I like having the entry on my bank statement, and it helps to keep me 'honest'. Like its to easy to be 'bad' and do fast food, etc. for lunch when using cash, as I don't have to reconcile that.

[Amadan]

I would suggest getting some software such as MSMoney if you can. I am using an old '98 version, so it didnt cost me anything. You dont have to have the latest and greatest if all you are doing is budgeting. This has been a real lifesaver for us. For the first time EVER we actually track what comes in and out and can make sure we live within our means. You can enter your income and expenses and play with the numbers until you figure out what you can actually budget for. We are also doing the envelope system as well and this works well with it.

Its basically like a much more detailed check register.

[RuthCB]

I would suggest getting some software such as MSMoney if you can. I am using an old '98 version, so it didnt cost me anything. You dont have to have the latest and greatest if all you are doing is budgeting. This has been a real lifesaver for us. For the first time EVER we actually track what comes in and out and can make sure we live within our means. You can enter your income and expenses and play with the numbers until you figure out what you can actually budget for. We are also doing the envelope system as well and this works well with it.

Its basically like a much more detailed check register.

You can't download any MSMoney software except a trial version, unless there is some peer-to-peer download and even then I'm not sure it would work.
Microsoft discontinued Money in Jan of this year. I loved it myself, but when I got a new computer, I had to switch to another accounting program. I picked Moneydance, but that was just my preference.

[momofthree]

We do all cash with the envelope system and it works very well for us. I spend MUCH less when using cash because I can actually see it and feel it and know that once it's gone, there is no backup plan. The first month was rough, I spent most of our grocery allotment in the first 2 weeks and we ended up on a ramen noodle and random canned-food diet for the last 2 weeks of the month. That isn't a mistake you make twice!

I find when I use a debit card, I just buy what I want and then end up suffering later on in the month. I don't even carry a debit card or checkbook with me when I go shopping--I just take my week's worth of cash with me so it's impossible to go over budget. If I'm over (usually an impulse purchase--cookies or something), then I put something back at the register, it was embarrassing the first couple of times, now I really don't care, I have a budget to stick to, and if someone wants to look down on me for that, then that's THEIR problem.

its to easy to be 'bad' and do fast food, etc. for lunch when using cash, as I don't have to reconcile that.

I have the opposite problem. If I'm using debit and can't "see" how much money I have left for the month, I'm much more likely to splurge on unnecessary junk. When I can see that I only have $150 and it has to last for 2 weeks, there is no way in heck I'm gonna blow $20, $10, or even $5 at McDonalds. I can make a full 3-course dinner for my family on $5 when spent correctly at the grocery store....

Edited to add: I do keep all my receipts, but it's more for me to review and evaluate my spending at the end of each month. My trustee never questioned my spending cash. But, then again, we do have quite a meager budget, so I'm sure he figured there was no way we had any wiggle room to be spending the money in other areas.

[Exployer1234]

I use my debt card, but try to hold out on depositing my money until it is time to pay my bills. This helps because I do not have any cash on hand and it is not in my account either. I have not used a credit card in about 3 years now.

[ssmdem]

I agree - I find I do way better with cash. Plus I feel like I'm setting a better example for my kids this way. They don't really GET the difference between a debit card and a credit card, and I just don't want them seeing me whip out the plastic every time we make a purchase.

We do all cash with the envelope system and it works very well for us. I spend MUCH less when using cash because I can actually see it and feel it and know that once it's gone, there is no backup plan. The first month was rough, I spent most of our grocery allotment in the first 2 weeks and we ended up on a ramen noodle and random canned-food diet for the last 2 weeks of the month. That isn't a mistake you make twice!

I find when I use a debit card, I just buy what I want and then end up suffering later on in the month. I don't even carry a debit card or checkbook with me when I go shopping--I just take my week's worth of cash with me so it's impossible to go over budget. If I'm over (usually an impulse purchase--cookies or something), then I put something back at the register, it was embarrassing the first couple of times, now I really don't care, I have a budget to stick to, and if someone wants to look down on me for that, then that's THEIR problem.



I have the opposite problem. If I'm using debit and can't "see" how much money I have left for the month, I'm much more likely to splurge on unnecessary junk. When I can see that I only have $150 and it has to last for 2 weeks, there is no way in heck I'm gonna blow $20, $10, or even $5 at McDonalds. I can make a full 3-course dinner for my family on $5 when spent correctly at the grocery store....

Edited to add: I do keep all my receipts, but it's more for me to review and evaluate my spending at the end of each month. My trustee never questioned my spending cash. But, then again, we do have quite a meager budget, so I'm sure he figured there was no way we had any wiggle room to be spending the money in other areas.

[SMinGA]

I guess it boils down to finding what system works best for each of us?

I also think it would be different if we were paid only 1 check per month, for example. Would have to budget ahead more. My full time job is biweekly, my part time job is biweekly on opposite Fridays from my full time job. So between those 2, it covers the big bills & small bills... Hubbies job is weekly pay every Friday, and it works for us to budget groceries/gas/household spending needs weekly.

If/when hubby gets a better job (and I can quit my 2nd job) we'll have to readjust perhaps.

[SMinGA]

My kids get the difference - literally had that discussion w/ my youngest (8 1/2) a few weeks ago. They understand credit is using money you have not earned yet, and so you have to pay more for it. Debit is using money from our checking account, money that is ours and so there is no extra cost with using it.

This past Saturday, grocery shopping at Walmart:

Youngest to me: Mama, did you use your debit card?
Me: Yes.
Youngest: GOOD!

I agree - I find I do way better with cash. Plus I feel like I'm setting a better example for my kids this way. They don't really GET the difference between a debit card and a credit card, and I just don't want them seeing me whip out the plastic every time we make a purchase.

[ssmdem]

My kids get the difference - literally had that discussion w/ my youngest (8 1/2) a few weeks ago. They understand credit is using money you have not earned yet, and so you have to pay more for it. Debit is using money from our checking account, money that is ours and so there is no extra cost with using it.

This past Saturday, grocery shopping at Walmart:

Youngest to me: Mama, did you use your debit card?
Me: Yes.
Youngest: GOOD!

I remember you posting that earlier. That's a cute story. And I agree you've got to find a system that works best for you.

I just think for us we need to go back to the basics. I KNOW for a fact my husband needs cash to operate with - willpower is a tough problem for him.

[ssmdem]

I guess I kind of equate it to a story my dad loves to tell about me when I was a kid. Asked him for money, and he said he didn't have any, so I said, "Well, write a check then."

My kids still will say, "Well, go to the ATM" and my oldest is almost 13!

[SMinGA]

What we learned about money/money management from our parents... Oh, now that is another topic LOL.

Can recall many times when my mom would write a check for cash at a store, and deposit the cash to cover a prior check. Then deposit my dad's paycheck a day or two later. And it worked. Of course - banks process things much quicker now so one could never get away with that now!

I'm trying to teach my kids about money management, the difference between needs & wants, etc. They know the 'debit card' is not an endless source of wealth! We don't discuss our entire financial situation with them, but we cover the basics. Such as they know that I'm working the 2nd job so we can cover our needs + occasional wants. It does sometimes lead to an interesting viewpoint from the eyes of the child. Apparently my favorite sport is grocery shopping, and my hobby is working.

Maybe its a generational thing, but my parents made no effort and still live paycheck to paycheck. Yet I recall my grandfather as the sort of person that always paid cash, would not even buy a car on credit.