I’ve never necessarily been “bad” at finances. But that definitely doesn’t mean that I’ve been good at them. My motto was always to never spend more in a month than I earned that month. And hey, I did that. But I wasn’t saving. And I wasn’t actually aware of my purchases. I would just swipe my card and check my billing total later. There’s no harm in that, right?
But then I kinda woke up one day and realized that I wanted to actually afford a house some day and I wasn’t intentionally saving money each month. And in California, if you want to afford something more than a broom closet, you need an actual down payment of substance, or you’re kicked to the bottom of the pile.
It took a couple months, but I’m now fully on the ‘Fueled Only By Cash’ train. I go to the ATM at the beginning of each week and take out the exact amount of money that I think I need that week, and I don’t spend more than that. And I don’t buy anything if I can’t buy it in cash. Yes, that does mean that some weeks I’ve looked in my fridge on a Thursday night and realized that I didn’t have any groceries left so I had to search through my pantry for some canned tomato sauce and dried pasta.
On average, I’m saving at least $500 more each month than I was before. Here are five tips if that’s something that you want to do too:
- Create A Budget. It’s not for everyone, but having a budget helps me prioritize my purchases and figure out how much cash I need each week. I use the app EveryDollar, where you enter in how much income you expect to receive that month and then you assign a category to each of those dollars that you have.
- Keep Your Receipts. I swear this seems silly, but having a paper trail of your receipts makes each purchase more tangible. I organize my receipts on DropBox. DropBox has a neat feature where you can scan your receipt and it’ll convert it into a PDF for you.
- Learn To Say No. Saying no to yourself sucks. It really, really does. But looking at your credit card bill at the end of the month and seeing all of your impulse buys that you didn’t actually need sucks any worse. And it helps you think about what you actually need compared to what you want.
- Keep Your Cash In Different Envelopes For Different Purchases. Don’t keep your grocery cash with your cat litter cash. When you do this, you can’t really keep track of how much money you have left for certain categories. Even if that means waiting to make a purchase until you can make it to an ATM, do it. I budget $50 per week for groceries, and I keep that money in a separate envelope than I keep my ‘Restaurants Cash‘ and ‘Pet Care Cash‘.
- Invest In A Wallet With Envelopes In It. Having a wallet that allowed me to put cash in different areas was the thing that really allowed me to embrace this new cash mentality. I use this wallet from Dave Ramsey.
How do you manage your monthly finances?