Help me go Cash Only....

[llori7]

Hi, I am trying to get out of a lot of cc debt. Plus we use another cc (no balance) monthly for everything we buy. I would like to go to cash only, and just have the cc for emergencies, while still paying down our other cc debt. I know this will cut out all unnecessary items that I just can't stop buying!!!! I need all your tips and suggestions for how to do this. We allot $600 a month for the cc monthly, but we ALWAYS go over!!! I truly believe we can spend between 600-700 a month!!! So please help or I will never get out of debt!!!

Thanks!

 

[taylor3297]

You going to need to have that 600 in cash, so you can see the money disappearing. By putting it on the card it is so easy to not think twice of buying something. When you have the cash in hand, it will make you stop in think. So one month you are going to have to somehow come up with what you owe on the one card and 600 cash to start using. We tend to put 100 at a time in our wallet and we try to make it last as long as possible.

 

[llori7]

You going to need to have that 600 in cash, so you can see the money disappearing. By putting it on the card it is so easy to not think twice of buying something. When you have the cash in hand, it will make you stop in think. So one month you are going to have to somehow come up with what you owe on the one card and 600 cash to start using. We tend to put 100 at a time in our wallet and we try to make it last as long as possible.

Yea, that is what I was thinking...I will have to pay off the cc, but then I will have to come up with $600 (out of savings??). Then have $150 a week to use. I am very scared to do this, but I know it is what I have to do.....

How has doing this helped you? Do you still use ccs???

 

[mom4scrapbooking]

It is going to be hard I am not going to lie! My husband and I just got a new loan that took all our debt and put it into one loan. All credit cards, back taxes, second mortgage, car and ortho upcoming payment all wrapped into one bill. It is a hefty payment but in 5 years I will be completely out of debt except for 1st mortgage. So staying out of debt I have cut and thrown out all credit cards and use cash only. On top of trying to put money into savings for emergency fund. I am trying to save my tip money up for a camera I have been wanting for years. SO many times I like gosh I could of charged it it would be so easy. But I know that if I keep saving a little money I will get there eventually. It is hard but really think about what you need.... OH and now my luxury shopping is goodwill but there are lots of cool things there....

Good luck to you!

 

[deerhart]

take a large plastic cup and fill it with water. Place ALL your credit cards in the cup. Stick the cup in the very back of your freezer. I did this with my DH's cards because he kept putting stuff on them and screwing up my plan to pay them off.

We have been 90% cash based for several years (though I rarely carry cash I use my debit card). I do have credit card debt (usually major purchases like computer or plane tickets and I do put some on at Christmas and then pay it off in the next 2-3 months) but it is extremely manageable and I could wipe it all out if I absolutely had to.

Now mind you, I do have the disposable income to pay for most of what I want out of pocket. I purchased our new TV and our new dining room table set with cash (part of our tax refund the last two years) and I pay for our vacations almost 100% cash (I charge the plane tickets just to get the extra travel protection etc.. I could pay them in cash as well).

I would suggest not leaving yourself strapped for cash the first month (as you'll be tempted to reach for the card). Pay the one card off over the course of 4-5 months and keep the rest of the money to get you through your month.

Also, have you created a budget? This should be based on your previous usage (and since you use the credit card its easy to track what you've been buying and how much each month by looking at the billing). While you may beleive you can live on a $500-$600 budget, you might be surprised that the problem is that your underestimating your budget. You cannot go through with what you want until you know EXACTLY where your money is going to.

How much of that 500-600 is going to food versus clothing to eating out to gas for the car? Are those numbers realistic? MOST people go to one extreme or another they way underestimate their expenses or way overestimate (I do divorce work and we have to file financial budgets and I am always having to interrogate clients on their numbers - what do you mean you spend $500 a month on clothing???!?!).

So sit down with all your old cc bills and make that budget and make it realistic. Once you have the budget start to prioritize. For example, if you like a certain type of designer clothes where can you give something up or cut back so you can have that instead, perhaps instead o spending $50 at the salon each month you can switch to a cheaper place and take the left over money to put into your clothes budget or to leave your clothes budget where it is. Don't forget to be realistic. Don't budget $100 in gas per month when your really spending $250. This isn't an area that is going to go down (its more likely to go up). Now it may change drastically by changing vehicles (or gas budget dropped $50 a month when my dh got a new car that got better gas mileage). The person that drives the most should drive the most fuel efficient car and you should take the most fuel efficient car on longer drives (unless you have other reasons not to).

Also pay off your cards smallest at the time. You'll pay less interest that way.

So 1) freeze 2) budget 3) pay off!

 

[apnep]

all unnecessary items that I just can't stop buying!!!!!

Hi there. Glad you want to go cash only. I'm confused, are you using the CC to buy groceries, clothing, or whatever willy nilly? Or is it what you use to live on?

I agree with the previous poster, you need a budget. Sit down and write out a list (or use your computer) of all your monthly expenses. Then you will see what you need to have in CASH to live. After you do this you will be armed with knowing that you cannot spend. If you don't have the cash, don't buy it.

Your post makes it sound like you just like to shop shop shop, but I don't know if that is true or you just use the CC to live off of. After you make a budget, the next time you go out and see something you want ask yourself, "Do I really need it? Or do I just want it?" I do it all the time and 90% of the time I usually just want it and don't buy it.

We pay cash (debit) for everything except major purchases which we then pay off in a short period of time. We know exactly how much money we need down to the last penny every month. It really helps me to budget all our bills out for the entire year in my Quicken and then I can actually SEE for myself how much money I can save or allocate funds to for the things we want. Seeing it on paper is really half the battle. The other half is saying "no" to yourself. You can do it!

 

[bettymae1121]

However you decide to do this, make sure your spouse is 100% on board with going to cash only. You don't want to discover that he isn't interested in changing his ways half way through the month when he's already blown through the cash on un-needed purchases.

 

[Samar]

We did an Excel spreadsheet when we realized how bad in debt we were. That really showed us how much unnecessary spending was going on. We took care of the debt, cancelled all cards and started from scratch. Well, DH has started rebuilding his credit, I have not. We now live off of cash only and DH uses his credit card for a couple routine purchases each month that he pays off immediately to establish good credit. It's so much nicer knowing the true figure in our account (I have stopped Excelling) instead of handing over the plastic and ignoring the charge until the statement comes in.

I agree with the PP who said to make sure your DH is on board. Makes things much easier.

 

[chyam]

Believe me it is not easy, but gets easier each month. I started back in Oct. I try to stay out of the stores period! I try to grocery shop once every 2 weeks, with a list! And I carry only cash with me, I use my debit card if something comes up like the dentist or the dr. but I defineately like seeing the cash, as it dwindles down I just ask myself if that thing I am looking at is something I really need. I pretend that I do not have any more money! and if I spend it that week I am out of luck for the rest of the week! I guess I have to play mind games but so far it is working...the cc are all cut up except for my gas cards, and that is just for convenience and I pay them each month.
Good luck, I am sure in a year I will have mastered the budgeting thing and as I said it gets easier and easier each week.

 

[MickQuinn]

My dh and I have been on a cash only system for years. A pp mentioned the mind game they play ... and honestly spending/overspending really is all about what is in your head. People can wind up going overboard whether they make a six figure salary or scrimp by on minimum wage.

Seeing the money disappear every time you make a purchase really does help retrain your brain to appreciate the value of your money. I used to spend $5 a day grabbing breakfast on the way to work. That adds up to $1,250 over the course of a year!!!! THe cash only system really helps keep this kind of spending in check.... and it's this kind of spending that can suck your money up without you even realizing it.

We are both paid every 2 weeks. We give ourselves an allowance of $100 for the two weeks. This is for gas (we both commute a distance to work), snacks, and any other "extras" that are personal and not part of the house budget. For example, I know if I want my haircut every 6 weeks, I have to take one-third of the cost out of 3 of my allowances so I will have the cash when I need it.

Dave Ramsey talks about an envelope system to help you separate your money, but I just use an old grocery coupon file that I relabeled.

Good luck.

 

[LoraJ]

I agree with the others, you definitely need to be sure that your DH is on board. Sit down together and work out a budget. Either on paper. spreadsheet or some sort of computer program. Mint.com is free. I use You Need A Budget (youneedabudget.com) and it has really been helping me to keep my spending down. I do not use my credit card unless I have the money in my checking to pay it off that day. I applaud those that use all cash, I do not feel comfortable with carrying around lots of cash where I live. So I have to be extra careful with my spending on my debit card. I download my bank statements to Quicken and YNAB every day to keep on top of everything.

 

[DVCBELLE]

We went all cash two years ago...and it has changed our lives!! I was quitting a part time job and we sat down to see if I had to get another one or not...

We are so much happier now - I don't get that pit in my stomach when I pay bills and went from where we could barely cover our bills to having a $1500 a month surplus!!!

The biggest thing was realizing where our money was going. Studies show people who use plastic (even a debit card) spend 25% more than those who use cash!

We ate out 2-3 times a week at $30 a pop and never batted an eye about it. Now when we eat out - it is because I have extra cash and it is a treat for us! We used to order pizza every Friday but we turned that into Turkey Taco night and I cook it instead! It is by far our favorite night of the week at half the cost!

My DH went to Starbucks every day and I tried to get him to stop but he said he made enough money that if he wanted Starbucks - he was going to have it. And since I stayed at home while he worked hard for our family - how can I argue with that. So we sat down and talked about what our budget would be. He agreed he needed $100 every 2 weeks. Funny that he quit going to Starbucks about one month into our all cash lifestyle! He said he never realized how much he spent there until it was actually cash!

On the day he gets paid - we each go to the bank - I get our family cash and he gets his cash. Then I can use whatever is in the bank account to pay bills or put in savings if we have an expense coming up. It is much easier than you think and you will be shocked on how many little things you wasted money on. Its good for the kids too - they know when mom's wallet is empty...that's it until payday!

If your DH isn't on board - ask him to try it for one month...I bet he will agree it is a better plan!

 

[DawnM]

We have gone to almost all cash. I still use cc for gas because with 3 younger kids in the car it is near impossible to go into the store and pay and then pump, but for most other things we use cash.

I stopped going to Starbucks or coffee places years ago. I sat down and figured out that if I spent even $500 on a very nice espresso machine and good quality grinder, I would save more than that even in the first year. I researched on coffeegeek.com for reviews before buying and I tell you, once you get the hang of it, it takes no time at all to get a quality barista latte every am. My equipment is now over 5 years old and still running strong.

I have also learned to stockpile when deals and coupons are going and spend way less on groceries now.

I could go on and on....but you get the idea.

We only have mortgage as our debt and we have reserves saved up in case of emergencies, etc....

Dawn

 

[llori7]

Thanks for the tips everyone! I do like to shop, but I don't "shop" for myself often. My spending is more going to Walmart for a few things. I leave with a buggy full of things and have spent over $100. I thought if I used cash, instead of the cc, I would have only bought what I was going there for.

My plan right now is to only charge the necessities for the rest of this month. I would like to see how I do with that. We already have enough food for dinners for the rest of this month. So we will just need bread, lunch meat milk, yogurt, and fruit each week. We will also charge gas.

Then once February hits, I want to try cash only for the whole month. I handle all the finances, so dh doesn't care what I do. He did say that gas is the only thing he charges, and he will keep doing that. I admit, I will too b/c with small kids, it will hard to run in the gas station with them all the time. So we will use cash for everything else.

I am excited to do this. It is like by doing this, there is a light at the end of the tunnel. I know it will be hard, but it will be worth it. Coming on these boards will give me the support I need!

 

[mrudman]

Hey neighbor! (See you're from twinsburg, I'm from stow, )

Dh and I are just getting into this cash-only way of living as well.. in October I started the envelope system, and even though it's only been 3 months, it's working out very well so far.

I had an "extra" paycheck during that month (get paid every other week), so I used all of that money to back-pay the envelopes. For example, our sewer, trash, etc. are paid every 3 months, so I put in a couple months worth to start us off.

And even though it made us live really skimpy during that month, I even was able to put in enough to cover all the "back-pay" amounts for our yearly bills, such as car insurance, house insurance, license plates, zoo membership, AAA, newspaper subscription, nursing insurance, school pics, etc.

So now each month, I use part of one of my paychecks to fill all the envelopes.. other paycheck is our house payment. And dh's paychecks go toward all the monthly bills/utilities, plus everything else (groceries, walmart, etc).

Feels soooo good when a major bill comes in, and I can just whip out the money and deposit it in the bank and pay the bill. Example, our house insurance bill just came couple weeks ago.. has always been a stressful time in past years trying to come up with $600.. but this time, I had the money just sitting there.. and was so nice not to have to stress where it would come from.

As you can see, we're defintely not living on a cash-only system yet.. we're working up to that slowly.. but just going to the envelope system has been a lifesaver for me. Love how just putting in a "small" amount each month into the envelopes is going to total up to what we'll need when each of those big bills come.. and won't have to worry about having any of them sprung on me anymore,