Whether you’re struggling to stay afloat financially, or just trying to save money and make smarter spending choices, you should consider a cash budgeting system.
In our family, we use cash-only for most expenses, including groceries, gifts, clothing, miscellaneous items and eating out. This means we allot a set amount to each category monthly, then place that exact amount of cash in individual envelopes labeled for each expense at the beginning of every month.
Here are five reasons I’d encourage you to consider setting up your own cash budgeting system:
1. A Cash Budget Gives You Freedom
For many, just the word “budget” has negative connotations. However, a budget doesn’t have to be restrictive. In fact, for my husband and me, it has had the opposite effect — the boundaries of a budget have given us a freedom we didn’t have before. For example, we don’t have to worry that if we buy groceries, we won’t be able to pay our electric bill.
When you create a written budget that includes allotments for every expense you foresee, you can feel free to use all the money set aside for a particular category without guilt, knowing that your recurring bills and expenses have already been accounted for.
2. A Cash Budget Demands Accountability
Setting aside cash for specific items makes you accountable for how you spend your money. When you pull that cash out of the envelope you can clearly see how much you have left to spend — and you have no excuses for running out of money before the month is finished.
3. A Cash Budget Encourages You to Carefully Examine Expenditures
Physically removing the cash from the envelopes will more than likely force you to think carefully and thoughtfully about your purchases. Do I need this item? Can I get it somewhere else for less? Can I make do with what I already have? Do I really want to part with this cash?
4. A Cash Budget Challenges You to Plan Ahead
Swiping a card makes it easier to live in the moment and not consider how today’s purchases might affect tomorrow’s financial stability.
Cold hard cash forces you to put some forethought into your spending because when the money’s gone, it’s not coming back.
5. A Cash Budget Gives You An Instant Raise
If you’ve never created or followed a budget before, the very act of writing down your income and dividing it into expenses categories will be eye-opening.
You’ll likely realize that a lot of your money is getting blown with little or nothing to show for it. If that’s the case, sticking to your written budget will give you an instant raise — even as your family paycheck stays the same.
(Written by Crystal Paine,Money saving mom & thanks to allyou)
. Happy Savings !!!
