Thinking of going back to cash

[dancinmama]

Originally Posted by disneysteve

To be fair, our system only works because a) we make a lot of money (over 100K) and b) we're both pretty frugal and careful with our spending anyway. We're able to do everything that we want to do on a routine basis without coming close to what our disposable income allows for. I always say that we save 25% of our gross but in reality we save more than that because we don't spend all that we have to spend. If having a drink at the bar could leave me unable to put gas in my tank, I'd be using a different system that more closely tracked day to day spending. That just isn't necessary for us fortunately.

disneysteve: We use the same method that you do and can get away with it for the same reason. I use a credit card for almost everything in order to get the rewards.

BUT when we were younger and first got a credit card and didn't have the income that we have now, here's how I handled it: every time I made a purchase with the credit card, I would come home and make a deduction for the purchase in the checkbook. This allowed me to keep constant tabs on how much money we had and ensured that we would not run up a big bill since it was "already paid for" in my balance.

[Frugal]

I also find it easier to curb and keep track of my spending with a debit card. However, I have noticed one exception with my own spending. I am always trying to find new ways to save money everywhere I shop, but particularly at the grocery store. I have noticed that the few times I have gone to the bank and taken out cash prior to grocery shopping, I spend much less, and am able to hold closer to an exact budget (say, if I only have $85, I only spend a firm $85, and don't allow myself to fudge and go over to $90 if I find an item I really like that costs more).

You have the right idea I think going with the cash basis. However, once you are married and have a house, it gets a bit harder to maintain with all the expenses coming at you at once. It was easier for me to use cash before getting married and having a house with all the associated expenses.