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From the very first day I stepped foot on my college campus I was given a credit card, I was easily approved for vehicle financing, and soon enough I had student loans collecting. Over the years in fact accumulating debt has been no trouble at all. However having money in my pocket has always been a biding challenge. If I get $20 out of the bank before I know it, its gone. Therefore the technology of the ages in having Visa debit cards supplied by my banking institution seemed like such a life saver. After all every where I venture I have the ability to pay for just about anything. Convenience at its finest right? Wrong! In the most recent years I have been noticing that even though our party of five makes a decent income we are forced to live a very modest existence and still barely pay the bills that are rolling in. Though we have never been thrilled to live paycheck to paycheck it still worked. Why fix something that isn’t broke? However there does come a time when life throws out expenses which do not fit in a fixed income. Such as household repairs, braces, and cars breaking down. Not to mention birthdays and holidays. So little ol’ me went search of a solution that would not destroy our already mediocre credit score. And here it is…pay cash for everything. That’s right, not so complicated eh? Better yet all over the world wide web you’ll find explanations of how to live your month off cash only through an envelope system.

Here’s how it work for us. First review your expenses from the last 3-4 months. Look through your bank statement, checkbook, or in my case your spread sheet and figure out where you spend the most. This, by the way, is after the core bills are paid. Write out what you spent each month on the basics. Then get an average number of each category and make it your starting budget. In our house I have 5 envelopes. Groceries, gasoline, dining out/ entertainment, household (laundry soap, prescriptions, toothpaste, etc.) and daycare. Figuring out what you need for each envelope is key because once the envelope is empty you are done spending in that category for that month. Note: it may take a couple of months to figure out how much you really need for each envelope and the point by the way isnt to cushion your envelopes too much because the idea is to spend less.

Now put the envelopes into action. Never take cash with you that isn’t predested to be spent on something specific. If your car is out of gas, grab money out of that envelope. If you need groceries, you know where to get it from or if you are planning to eat out, take only what you need for that meal. The system works for several reasons but here are a few top. First, it hurts more to spend cash so you’ll likely think through each purchase more carefully. Second, you can’t spend what you don’t have on you. You’ll also have to preplan more of your expenses like making a weekly meal plan before running off to the store. It might surprise you how much cheaper your grocery tab can be when you only pick up items off the list because its all you brought money for.

I have so much more to say about this system and what it has done for our family so come back for more.

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