Pay with Cash
By this time next year, hopefully, Raf and I will be completely debt free. We’re following Dave Ramsey’s baby steps, and by the time everything is all said and done, we’ll have been on baby step 2 (paying off all debt) for nearly 5 years. It’s a long time, but we’re seeing the light at the end of the tunnel!
Besides creating a budget, one of the things that has really helped us limit our spending and prepare for future expenses is the cash envelope system. We take the money we budget for groceries and put it in the grocery envelope. We take the money we budget to be set aside for the year’s gifts and put it in the gift envelope, etc. The problem is that we’ve become a little sloppy with this. We don’t always get to the bank or ATM to take out the cash, so we end up using the debit card instead. If one envelope runs out, we might borrow from another envelope. Obviously, this creates problems in the long run and basically makes the budget worthless, and the budget–well, sticking to the budget–is really what makes getting out of debt possible.
So let’s try using the cash envelope system as it is intended to be used. No charging or debiting what can be paid for with cash. No borrowing from other envelopes. No spending in that category once the money in the envelope runs out. Can we do it? If we can, we’ll be that much closer to getting out of debt, saving for emergencies, a house, and/or college, investing towards retirement, and mostly important, I think, giving to those who are in need. Leave a comment if you intend to give it try, or tell us about your successes and failures with the envelope system if you’ve used it before.