Buying Groceries with Cash

We attended Dave Ramsey's Financial Peace University at our good friend's church over the summer, and while watching the videos and doing the class homework definitely provoked changes in some of our opinions about money, the really great thing about taking the class was the group discussions. We took the class with just a small group of people (not surprising given the remote location where we live, and the church where we are taking the class is 45 minutes away even for us). Attending were us, our friends, another couple, and the couple that run the church (who are our friends parents/in-laws). Apart from the couple that run the church who are obviously older, us and the other 2 couples each have kids that are around two and a half years old - 2 girls and one boy. So we were about in the same life-stage, although one couple is a bit older than us and one couple is a bit younger than us.

We've been keeping track of our spending since before we married, and have been using a zero-based budget loosely based on Dave Ramsey teachings since shortly after we married, so we've slowly learned a lot about money and about behavior around money, so we didn't have huge steps to take during the class since we already had an emergency fund and were already using a zero based budget, but we still let ourselves get as much new information from the class as possible.

The group discussions were likely the part that I got the most from, not the strict class materials. It made me glad that we didn't do the class online like I had been thinking of, since we live so far out. During the group discussions we would often get off topic from the lesson questions, and talk about things like ideas for saving money, living simply, and cooking healthy food. As a result of some of these discussions, last month and this month my husband and I made the switch to using cash for our groceries. Our friends have been doing this now since the class started, and I've seen people blog about doing so numerous other times, so you'd think I would have tried it by now.

But for us, it seemed like grocery shopping was under control - and it was. We had a very small grocery budget, and if we went over, it was near the end of the month, so it just came early out of next month. And by going over, I mean like 20 bucks. After all, with a $280 grocery budget, it's easy to go that little bit over.

(Here is where I need to explain that there are a lot of things not in our grocery budget - dog food, we have a separate line item for it, to the cost of 2 bags a month for our 3 medium/large dogs. Toilettries or basically anything not edible, again, separate line item for those things. In addition, we raise our own eggs, we're currently raising a pig, we grow a larger-than-normal garden augmented by a separate deep freezer, and we hunt and fish (or trade) for a lot of our meat. The money for the feed that we give to our laying hens and butcher pig doesn't come from our grocery budget - we have a separate line item for that food. And the money for hunting licenses & gas for hunting also doesn't come from our grocery budget. So you see, there is a lot that we eat that really is outside of that $280/month (just trying for transparency here!).)

Anyway, back to our actual grocery budget. I read lots of posts about how people were amazed at the change when they switched, but I didn't really think it would be like that for us. After all, we use essenitally cash on our debit card, and know how much we have when we go in to the store, and generally stay within our allocated money each month for groceries.

But the reality was a bit different. I hadn't thought about the effort I put into making sure we stay within our grocery budget. Looking at our receipts, entering debit transactions into our budget envelope spreadsheet, keeping an eye on the grocery amount remaining in the spreadsheet before I go to the store. Having all the available cash right in front of my eyes when I was in the grocery store was just way way easier.

And come the end of the first month, I had only one trip left to get a few things to tide us over into the next month, and I realized that I still had $50 in the envelope! Obviously my spending habits, even with a monthly meal plan that I don't remember being different from previous months, were different using just cold hard cash than with a debit card. So we again took out grocery cash for this month. And I expect we'll do it again next month. Because it's a nice feeling at the end of the month to realize we can stock up on sale items that we'll use next month!

So, long story short, if you haven't tried cash for groceries, and I mean real hard cash people, not a debit card, you really need to give it a try. Say you're going to do it just for one month. Like I did. And then say you'll go back to your old ways, cause they aren't so bad, after the month. Again, like I did. And if you find yourself converted, like I am, then I welcome you to this side of the tracks :) (not that I think there is anything wrong with the other side of the track, I've just realized that at this point in our lives, I like this side better).
So now, we've paid cash for our late honeymoon in Hawaii, and I mean we used cold hard cash while we were there, we've been using primarily cash for our blow money (apart from when we order things online, when we deposit the money back into our account or don't take it out in the first place if we know we're going to order something) and now we're doing cash for groceries.... what next?

What about you? Do you have a zero based budget? Have you ever tried using strictly cash for groceries? Do you have other things you pay for in cash?

Digital Cash Envelopes

We started getting serious about our budgeting near the end of last year. I started reading Money Saving Mom and then Dave Ramsey, and the rest is history. I don't get into politics or religion on here, but in terms of finance, Dave Ramsey has been awesome. Our budget doesn't completely follow how he suggests - we have it tailored more to our goals and situation.

I've budgeted my entire adult life, but until now I never had a zero based budget. And definitely since my husband and I got married and I started budgeting for both of us, my 'budgeting' was really more record keeping. We weren't going into any debt, but we weren't really saving any money, and definitely not like we are now that we have our strict categories. Yay for saving money!

I have played a lot with tracking each envelope month to month, and currently have a system that really works well for us. Since I get paid monthly and my husband gets paid twice a month, we do our budget monthly. I have a column for expenses, a column for income, and 3 columns for the envelopes: one has the remainder from last month, one has the additional new money for this month, and one shows how much we have total in each 'envelope'.

Every time we spend money, I put the entry into the expenses column, and subtract that from whichever envelope it belongs to. Similarly, every time we bring money in, I put it into the income column, and if it is extra on top of our paychecks, then I add it into the new money column. It works quite well for how I think, and I love how in excel when I make a mistake, I have cells set up to show me that my overall totals don't match, so I can go back and fix my mistakes!

I love how this budgeting system means I am no longer the nagging wife - 'shouldn't we save that money instead of spending it on X'. Now we just have to look at our excel spreadsheet to see if we have money to eat out, or buy clothes when we find a really great deal online. I print the totals about once a month and hang it on our fridge so that even if I'm at work with the most current version of the budget, my husband can look to see approximately what we have in any given 'envelope'.