I have burned through a lot of cash this month. I am typically a credit only spender – I try to keep my cash purchases to a minimum because I end up losing track of where the money went. Cash seems to grow wings and fly out of my wallet. Usually this isn’t a problem. I withdraw around $60 a month and even though I’m not tracking where it goes, I know that I spend cash at the farmer’s market and when going out for drinks with friends. I don’t worry too much about which amount goes where.
This month, things have gone haywire. Part of the problem was that while I was out to dinner with friends, the restaurant’s credit card machine went down, so we all ended up paying in cash rather than wait for the credit cards to be called in – which eliminated a chunk of the money that I had planned to spend at the market. This meant a trip to the ATM. Then, after going out to dinner, I ended up paying for someone else’s dinner on my card and getting cash from her, so there’s once again a chunk of cash in my wallet.
I’m doing my best to not spend it so that I can start October with cash in my wallet and not have to withdraw quite as much from the ATM, but it’s hard. It’s so much easier to say “Sure, I’ll go for coffee” when I’ve got a $10 in my wallet than if I knew that I would have to pull out my credit card, save my receipt, and log it in my budget.
Clearly, one solution to this would be to start tracking my cash expenditures, but every time I’ve tried that, I’ve ended up overwhelmed with receipt-less transactions (like when I go to the Farmer’s Market).
I continue to be impressed by people who have gone to a cash only system. Even though I’m good at saving receipts, I like putting all my purchases on one card so that I have an easy record of what I’ve spent and where I’ve spent it. Plus I really like rewards. Additionally, it’s good incentive to control my spending when I have to watch that credit card balance climb, knowing that I plan to pay it off at the end of the month. The lower the balance stays, the higher my bank account balance will be once the bill is paid.
I think maybe I’m weird in this – so many people find that “cash only” is the best way for them to control their spending. But I guess this just shows that the solution to keeping spending down isn’t one size fits all. What are your tips and tricks to controlling your spending?
Megan is a 40-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:
In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance. It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information. It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck. While that was working for me, clearly I needed a better plan.
While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.
Except that’s not what an emergency fund is for.
So I did a lot of research, read a lot of blogs, and decided that I needed a plan. I needed to budget. I needed to know what I was spending my money on. I needed to prepare for the future.
I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way. I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.