Paying cash is another principle that Dave teaches that is an awesome tool.? I was actually hesitant on this one at first as I thought we could just use our debit card and keep track of the balance in each category in a spreadsheet.? Once we started Financial Peace University, part of our kit was this cool envelope system that holds cash for several categories.? Because it was such a?neat little contraption, I decided to give it a shot.
The amazing thing I discovered once I started using cash is how painful it is to hand over $20 bills compared to just swiping my debit card.? Before, it was nothing to swipe $125 at Wal-Mart for groceries.? Handing over the cash for the same purchase is painful enough to change my behavior.? Now we spend about half of that every week, with $150 budgeted for every fifteen days for groceries.
Once we get out of debt and get to make big purchases again, cash is the only way to go for these purchases.? When you walk in a car dealership with $100 bills, they will not allow you to leave with them.? You will get a good deal on the car.? The same thing applies with furniture, appliances, or any major purchase.? Even when shopping at chain stores that you think the price is set; it is negotiable, especially when you have cash.? It can save you thousands of dollars.? Paying with cash will help make sure you are not breaking your budget, and will keep you out of debt.? Cash is King!
Right now we have eight envelopes, or budget categories, that we fund or spend out of only with cash:? Groceries, restaurants, blow, clothing, gas, misc/postage, hair care, and gifts.? It makes a huge difference in our lifestyle knowing that the cash has to be in the envelope before we can even consider the action (eating out, getting a hair cut, taking Jeremiah bowling, etc…)? It definitely is nice having a Mom who supplements the blow money specifically!? That can provide some much needed recreation!
[…] Several weeks ago I wrote a post about paying cash, and how important it is for a variety of reasons.? This past week I have re-visited this need.? Don’t worry, I haven’t fallen off the wagon and started using my credit cards again. […]
Pingback by joelmaxwell.com » Paying Cash…Again — June 1, 2006 @ 1:30 am
Right now we have eight envelopes, or budget categories, that we fund or spend out of only with cash: Groceries, restaurants, blow, clothing, gas, misc/postage, hair care, and gifts.
Exactly how much money do you spend on blow per month? Just curious…
Comment by Cathy — August 7, 2006 @ 4:41 pm
Right now we spend $50 per month on blow. I think that is a little low compared to what a lot of people; particularly with an income like ours.
Comment by Joel — August 8, 2006 @ 12:01 am
Great site…what is “blow”, exactly?
Comment by Umm — January 6, 2007 @ 4:11 am
Thanks for stopping by. Blow money is simply money that can be spent on anything; i.e. a soda, candy bar, or maybe a ticket to a ball game, etc…
Comment by Joel — January 6, 2007 @ 10:02 pm
OH MY GOSH, I am completely blown away. I came upon your blog from amys blog and came across hers by way of a google search. I am a 21 economics major a buffalo state college. My dream is to become a credit counselor. As a junior in college I started to assess myself. Knowing that my bachelors level of schooling will be done soon, I started thing about my own finances now and how they would be after school… I slowly begin to seep down into my chair after after giving myself the “finance checkup”. If my finance checkup could compare to a health check up… I would most certaintly have a a heart attack, diabetes, cancer and every other possible disease out there. All jokes aside. I credit cards with a total of 3500.00 and about 13,000 in school loans already (I one more year left) 2 unsubsidized loans in which i have to pay intrest on now. I am so scared now that i have woken up and realized what a mess im in, BUT i have been inspired your story. I do see a bright side to this and it is that i have just turned 21 and not 41 so with faith and effort I will try to change things around.
thank you for the inspiration…
please give feedback
Comment by Crystal O. — February 20, 2007 @ 10:04 pm