Saturday, December 6, 2008

Cash Budgeting

I realize that many would consider the next statement to be the blackest of all can survive without a credit card.

I now have no plastic whatsoever. I also have no debit cards, ATM cards, store credit, I have no way of buying anything unless I (gasp) pull out my wallet and count out the cash.

Now, realize that a great deal of this is caused by external forces...I all the sudden didn't get religion and become frugal by choice. No, I did this because after 60+ weeks of unemployment I managed to snag a job that pays A LOT less than what I was accustomed to burning through. I thank the good Lord for my good fortune every single day and now I am developing the strategies needed to live within my reduced means.

So, back to cash. I have mixed feelings about the stuff. Anyone can use it, you can't trace it, it is slippery stuff. But unless you have it on you, it doesn't do you a lick of good. So you have to strike a balance of keeping some in the bank (and you all know my opinion of those swine) and keeping what you need on your person or secured in your house/yard. I know bunches of folks who bury stuff in the backyard for long term storage. There are myriad hiding places in a house, use your imagination.

Having your spending money physically available and there to look at makes it easy to manage your budget. You can get a good clear visual of the amount of money that you have on hand and how much it is you have to spend.

Paying bills is more problematic. Checks and stamps and crap like that are a real problem. I put just enough money in the bank to cover all my current bills (loan payment(1), rent, car, car insurance, electricity, phone, water, garbage). I then use the electronic bill payer to send the money out and the deed is done. I keep a bare minimum in the account for them to play with or for me to lose.

I then take out all my spending/saving money as good old greenbacks. I prefer ten-dollar bills. These go home and into the "sugar jar". I use this for everything. Groceries, gas, trips to the soda shop and ice cream parlor, name it, it comes out of here.

The key is is that you leave the money there. Yes, you can carry a tenner with you for stuff, but if you want to buy something, you have to think about it, figure out how much it costs, find out where to buy it, go in a dicker for it...think about it. Then you go home and get that amount of money out of the sugar jar and go make the purchase.

Don't leave your family out of this. When you come home with the cash, sit everyone down and explain the amount of money that is going into the sugar jar and the length of time that it has to last. Have a little 79¢ notepad in the sugar jar. Let everyone take what they need, but have to write it down. That way you co-opt you family into the act of saving money and understanding the amount of cash available. It will cause some arguments, but it will have the added long-term benefits of having your children learn to live within their means.

When you boil all this stuff down, it comes down to the simple idea of living within your means. If you are going to survive the spasm that is taking shape, you will have to get over the childish concept of "impulse buying". All I am talking about here is a structure that will allow you to do this. All of the squealing and whinging being done in the mass media and among your friends and neighbors are nothing but the dismay of spoiled children when they find out that the world doesn't rotate around their needs and wants.

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