Bringing back plastic

>> Friday, July 19, 2013

Why we don't budget with cashWe are budgeters. I have a thing for spreadsheets and numbers. Every day I open up that my beloved spreadsheet and enter things in and recalculate things and just bask in the order of it. The nerd in me really loves that it is one thing in life that is just numbers and equations. That part is easy (almost). But you know the hard part about budgeting, the part that everyone hates – actually sticking to it. Bleh.

We’ve tried many things over the years. For a long time we just used our credit cards (paid off every month of course) and bought what we needed to buy. We checked in on the budget every week or so to make sure we were on track. But sometimes it was the end of the month, and the end of the money, but we just needed something. So we went ahead and bought it anyways. Now normally, this would put someone in debt really fast, but my husband earned strictly commission for years and would receive compensation in a few large lump sums over the course of the year so we almost always had a bunch of money in our bank account. Somehow we always made things work until we got paid again.

Then my husband got a “real” job. The kind that deposits a predetermined amount in our bank account every month. The kind that actually helped us to realize that we really needed to actually manage our money. Around that time, I jumped on the Dave Ramsey bandwagon. We didn’t have debt but I knew our budgeting could be a lot better. So I began to withdraw cash and put it in envelopes. It worked pretty good for me. It definitely was a lot harder for me to let go of cash than to just swipe my card but there were a few huge issues for us.

The first is that my husband doesn’t like cash. For him, cash feels like “extra,” since that was the way we had kind of always treated it. With our previous ‘card-swiping’ system, cash always came out of our budget when with withdrew it so it was basically our blow money. If he had cash in his wallet, then it was slowly dwindled away on snacks or treats or who knows what else. We recognized that right away and so he started leaving the cash at home. But then we kept running into other issues. Like how he would pay for something if I asked him to stop at the store on the way home. Or if he needed to get some supplies for his class after school (he’s a teacher). So then he would end up using his credit card and when he got home we’d take out the cash and put it another envelope to be deposited back into our bank account to balance everything out. It was a pain.

But the other issue that really bothered me was that it was hard for us to both be on the same page. Jeff is really great at the big picture stuff. I work better with the little everyday details. So while we talk about our budget in general terms, he trusts me to do the math and figure out all the specifics. The problem with that was that it would often come down to him saying we needed something and me being the downer, always saying we can’t afford it. Because I knew exactly how much money I had left in my wallet but he had no idea. All in all, cash was just not working!

But lest you think that this is just a sad tale, have hope. There’s a happy ending! After a couple months of struggling with cash to make it work (Everyone says that cash is so easy! What’s wrong with us??), my husband suggested that we go back to using our credit cards. I was super hesitant and expressed that while that solved concern #1, it did nothing to alleviate concern #2 and even brought up another concern (being able to see at all times what was left in our budget).

And then my smarty of a husband said, “there must be an app for that.” And he was right. I quickly downloaded a budget app (this is the one we use) and it has literally changed our life. We fill our “envelopes” in our app twice a month and now both of us can use our smartphones and see at all times exactly how much money we have left at any given time. All we have to do is enter each transaction as it happens, which takes about 30 seconds. I know there will be those that disagree (I know this is practically blasphemy to the Dave Ramsey fans out there) but this solution has helped us big time!

So the moral of the story? Don’t give up! Just because one person (even if they are a finance guru!) claims that their method is the best, or only way, you don’t have to do it if it doesn’t work for you. Keep trying until you figure out something that does!

**Just for the record, I do still think the cash system is awesome and can be really useful for lots of people, especially people wanting to drastically change their spending habits. So if you are thinking of trying it, please do! And if you already use it and love it, carry on!


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