New Budget
(money photo found at Gourmet Gal)
The first few weeks that I was out of work, I didn’t really change my spending habits much. I had my final paycheck, complete with over 100 hours of PTO. I had my severance, puny though it was. I won’t say I was in total denial, but I was in partial denial. I bought some clothes, thinking that I will need them when I start working. Having worked from home for several years has put me in a bad situation in that department. I stopped at the grocery store whenever we needed anything, and as often as not, I ended up leaving with a lot of things that weren’t on my list. As I watched my bank balance decrease, I realized that I needed to do something about the situation. My solution was a pretty simple one. I now pay cash. That ATM card isn’t as bad as a credit card, but watching the numbers fall in my checkbook isn’t the same as seeing money go out of my hands. So I figured out how much I have coming in from unemployment, how much our monthly bills are, and what is left when I subtract bills from income. I went to the bank and got some cash, and that’s what I have to spend for the week.
This is week one on the cash plan, and thus far, I’m doing pretty well. We did a big grocery shopping on Sunday, so I haven’t been going to the store every day like I used to. If I find myself thinking I’d like x for dinner instead of the planned item, I think, “Am I willing to spend my cash on that, or would I prefer to save it, and maybe put x on the menu for next week…we can buy the ingredients at the grocery store.”
Maya wanted some new spring time clothes, and asked me if we could go shopping. She had two gift cards (opposite ends of the spectrum…Target and Nordstrom), so I told her she could use those, but I wasn’t in any position to chip in. She was fine with that, and got herself some very cute silver ballet flats at Target, and a very cute top at Nordstrom. She feels like a million bucks, and I didn’t have to spend. (OK, the shoes were $1.05 more than she had on her card, so I chipped in. And we treated ourselves to a small slushy thing at the snack bar. But that’s it.) For more clothes, she has a birthday coming up, so I’m telling anyone who asks that she wants clothes money for gifts this year. Practical, and really, what else does one buy for a 13 year old anyway?
Today I’m going to lunch with some old coworkers. The company had another round of layoffs, so this time I’m chipping in to buy lunch for the newly laid off person. I’ll pay cash. Tomorrow, I’m thinking of going to a movie. Did you know that the first showing of the day is only $6 at our local chain? Awesome. Not sure if I’ll have money left for popcorn, but if I do, I’ll pay cash.
How about you? What do you do to keep yourself on budget when times are tough?
15 Comments
Autumn's Mom
I’m really proud of you…and maybe this is something we can institute in my house! I never ever have cash and am in constant worry when using my ATM. I don’t go grocery shopping every day, I actually find it annoying to go to the store haha. I have to really plan out and shop at places like Costco and Winco for the week. Otherwise, the money just flows out too quickly. February was a very tough month for us. I always try to plan ahead for the next month, while we have the funds. Thanks for this great tip. It’s just a good idea to think before you spend. Even on popcorn 😉
Liz
We’ve been doing the cash thing since January, and so far it seems to be working really well for us. I agree, it’s much easier to avoid spending it when you are looking right at the cash and not just swiping the card. Enjoy your movie! 🙂
CuriosityKiller
Awwww… J. You’re so great. I’ve never had to worry about little ones so my budget is fairly manageable, I just had to worry about myself. I remember years ago when I was working for a company and got laid off… and the severance package wasn’t much to look at. I was panicking alright. Paying cash is a great idea — really keep your eye on what you have, and keep a cool head — and not in a dreamland pretending the magic credit card would give you everything you need.
At that time, I was really on my own, I didn’t have family to call for help. I got maybe just enough for a few weeks to stay afloat, and it would nothing left — and I mean nothing (I didn’t have much on the credit card limit anyway, so it’s not something I can live off to hold myself at all). So I got into ebay selling. I sold whatever I have around my house — and when you realize it’s about getting food on the table, suddenly you’ll find tons of things you don’t need that you have. It really helped me fund some extra cash. It’s a lot of running to the postal office to make sure you don’t get ripped off on the shipping, but it keeps me real busy and I’m making an income instead of sitting at home thinking of how I can spend the depleting amount of money I had.
And even after I started working again… and then quitting and started working for myself — I got in the habit of going through my clothes and getting old clothes altered. Stretching my wardrobe kept me happy, not just barely surviving – but looking up to date and polished. Money’s tight of me right now too – I know it’s not the same as not having an income at all, but I certainly can’t afford to buy a new wardrobe in this super fashion-conscious city. So I spend alot of time studying latest fashion trends online, pulled out at least a dozen pieces of clothes I can’t bear to throw out but can’t seem to have the occasion to wear (i.e. a lavender cashmere suit jacket that I have never worn in 2 years)… I take to them to the seamstress and get things shortened, lengthened, loosened, or refitted. You might be able to do that with Maya’s clothes? I don’t know how kids feel about having pre-loved clothes refreshed, but it sure keeps my mood up when the time is rough.
lilalia
Like you, in tough times we do the cash thing. It works. Even though we might be tempted for birthdays, or Christmas to charge something on our credit cards. We try as much as possible not to do this. At times we we are both properly employed, we do go back to using bank cards, but not frivolously. Do you find it is surprising how easy it is, or do you think the honeymoon will be over soon?
Donna
I’ve been all cash/debit card for about 8 years now. I know exactly what I have coming in, exactly what goes out for bills, and exactly what I’ve got for food, clothes, entertainment, crafts, etc. I only fudge between the clothes, entertainment and craft amounts tho as we don’t always need clothes, might choose not to go out and most of the time, I can find stuff around here to get crafty with – so it’s easy to shift funds between those 3 categories. The base expenses are set – rent, food, utilities, transit, savings, and stuff like that. 🙂 I like living the cash life. Won’t ever go back to using credit.
Linda Atkins
Wow, great ideas, CuriosityKiller (let’s see, if curiosity killed the cat, does your screen name mean you’re a major lover and protector of cats??). And good for you on the cash, J! I got into trouble with credit cards once upon a time, so I’m very, very cautious with the one I have. For years, I used cash or a debit card only, until my mother convinced me that a credit card offers more protection in some scenarios (not sure if that’s even true anymore), so now I use a credit card quite often, but I pay it off in full every time I get a bill.
Rain
We are on a budget for the first time in many many years. It’s definitely different to have to stop and think about any expenditure. Ours came about because Farm Boss, who is theoretically retired, lost his consulting contracts (the ones that paid anyway. We could start SS now but prefer to wait until we both turn 66 which will be later this year. SS is not a lot but it at least will be steady income but it’s all very new to have to think about what we can actually spend or should spend. Growing up as I did without a lot of money, I do not mind; but it is a rethinking. Cash is a good way to avoid the last minute, impulse purchase which is so easy to do in any store.
Starshine
We use a budgeting service (online) called Mvelopes.com
We love it. It is basically the Cash Envelopes system, but you can use your debit card and it all happens electronically. Even though it is a debit car purchase, every purchase has to be accounted for in one of your envelopes. It’s been great for our first couple years of marriage, because our spending is open for both of us to see. 🙂 I think we’ll keep using it for years!
xo
Linda Atkins
Oops, I realized I forgot to answer the question. In my very no-money days, I paid my rent and paid my utility bills–I already didn’t have a car and still don’t, speaking of ways to save money–but I pretty much bought nothing else. I went to the movies not, I bought socks not, I read the newspaper not. Health insurance I did not have. As for food, weekly I bought a bag of brown rice and a bag of dried beans and a pile of produce, and I basically ate that thrice a day. I couldn’t do it now, but back then I did it for years, and not only was it cheap, my cholesterol was falling off the bottom of the charts and I weighed some tens of pounds less than I do now. I didn’t even add oil to those dishes. (I just saw your two comments, J., and have published them. Sorry it took so hecka long; I guess I haven’t been on my computer at home for a while.)
Ted
I think the last time I tried “cash only” was before ATMs. It worked out just fine back then — but I was 18. But the way I deal with overspending is to sometimes look at my bank account before going out. That way I have an idea what I’m comfortable spending. It doesn’t always work, though.
simon
A lot of older people I know (my father-in-law, for example) always prefer to pay cash so that they can see exactly what they’re spending, and also because they don’t trust cards.
(un)relaxeddad
Brilliant stuff – we’ve started sneaking in homemade popcorn to cinemas which has the added bonus of being able to by-pass all the gunk they put on it.
OmbudsBen
Getting laid off in ’93 was a big adjustment for me, after working full and overtime since ’81. I emphasized rice, beans and salad to make the unemployment last and not dip (much) into savings. Books were my entertainment, save for Red Vic movie house discount cards. (I think it was 4 movies for $15.)
After that, I had a series of jobs moved out of town on me. (Seriously: to Rochester, NY, Lousiville, KY, and then Colorado Springs — at least they were getting closer.) I learned not to let the media scare stories get to me. Statistics have limited relevance; one’s fungible skills mean a lot more.
Hang in there, J.
ML
I’ve been doing the cash thing for a number of years – it keeps me in check – when it’s gone, it’s gone. With debit cards I have this false sense of security that’s, indeed, FALSE. Maybe it’s all in my mind, but cash seems more realistic? You’re doing so well with your layoff, J – very grounded.
J
That’s exactly it, ML. The debit card isn’t as bad as a credit card, but I’m thinking cash is the best way to go.