Tuesday, March 29, 2011

The Cash Experiment, my version.

One of my Big Three is Budgeting.  Maybe I should have termed it saving since that is the main goal, but I guess they do go hand in hand.  I’ve decided to come up with a plan to make this happen.  I can easily say I want to save money, but unless I really make a step by step plan, all I am doing is saying it.

This is my plan, at least for now.  As with anything, there will be adjustments I will need to make along the way.

Part 1:  The Accounts
These are four things that I feel are important for me to do at this point.

  1. No more pulling money out of savings account (1) to beef up the checking account. 
  2. Put a certain amount* in to savings account (2). 
  3. Build a ‘cushion’* in my checking account. 
  4. Build savings account (1) up to a set amount*.  Once I get to that amount I will start putting the ‘extra money’ into savings account (2).
* I have numerical amounts written down in my notes, but I decided to keep them personal.

Savings account (1) is for extra money if/when I need to make big purchases. If I had this money in my checking account, I would want to spend it.  With this account the money falls under the “if I don’t see it, it isn’t there” thing.

Savings account (2) is money that I won’t currently allow myself to touch at all, unless I have a damn good reason.  This is money that I know is there, but pretend it doesn’t exist.

Part 2:  The Cash Experiment

Has anyone else read about the cash only envelope system and thought, yeah that sounds great, in theory, but would I really do that?  That is how I am feeling.  I think it is the dividing it all out that just throws me off.  It just seems like a lot of guessing and a lot of work.  I know me I’d get lazy and not do it.  How horrible is it for me to say that?  I’m just trying to be realistic and honest with myself.

Now don’t get me wrong, I understand the cash only envelope system works for many people out there.  I’m just not a one size fits all kind of girl.  I love the idea of using only cash.  I know that as long as I can keep my debit card in my wallet when I run out of cash it will help me spend less money.  I just don’t love the putting it into a dozen envelopes.

Dividing the money:
- Bills will be paid with checks. 
- Gas for my car will be paid for the debit card.
- Set amount of cash for ‘spending’ money.
- Any money that is after the first three will go into the savings/checking accounts as listed out in Part 1.

Calling the cash spending money is a little misleading, but I’m not sure how else to word it right now.  The cash is for anything outside of my bills/gas that I buy.  It really doesn’t matter what I call it, as long as it is a limited amount and when I spend it I’m done. 

The cash will be in just one singular envelope, called my wallet.  HaHa!

Part 3:  Buying/Spending Less

  1. I am putting myself on a clothes buying hold for the moment.  The only items not including will be socks and unmentionables, if needed.
  2. Anything I buy for the house must be something that I LOVE and have a home for.  No random buying some thing just because it’s cute.
  3. Cut back Walmart trips to twice a month (every two weeks), unless it can’t be avoided.
  4. Shop with coupons for healthy/beauty/cleaning items and for food items when it really is a deal.
  5. Not carry money to work, so I don’t give up to getting fast food at often.
I’m sure I’ll think of other ways to spend less money or have to make adjustments along the way.  This is just the start of my Cash Experiment and my attempt to save more money.

Disclaimer:  As I said I’m not a one size fits all kind of person and I fully believe that everyone has to do what works for them.  The above is my way of trying to find what will work for me.

I work both a full and part time job.  I am very fortunate not to have any past debts that I have to pay off.  The only payment I have is for my car and I am lucky to have very few monthly bills.  I am also only accountable for myself.  I do not kids or a husband that I have to factor into the money equation.  This changes my situation considerably when compared to others. 

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