Cash Budget, Part 2

So Tricia (Hi, Tricia! Where ya been hiding?) asked for a follow-up on the particulars of our cash budget. I'll fill in a few holes here and give some specifics.

I will say that it works the best if you and your partner are really willing to talk money every night. Not a lot of talking, but everyone needs to be clear on just what's in the pot and what's coming up throughout the week. If you have a spouse who tends to do most of the spending or is used to swiping that card, it may take a little while to get the hang of the money chatter.

• On payday, I take out $280. I only take out what I need for a week, even though the pay period is two weeks. I go back a week later and get another $280. That way I'm not borrowing cash from myself too far in advance. I budget $40 a day, but I try to spend $20 or less. The idea is to put at least one $20 away at the end of the day.
• Every other paycheck is our "free" check, where I have a little more flexibility as we're not paying our house payment with that one. I make sure that anything that's not an everyday expense is listed and prioritized so that when "Check B" comes rolling around, I know if I need it for something like car maintenance, a doctor's visit, gifts, etc. When we have a major emergency that I haven't prepared for, there's always something in savings. We work hard to make sure that we're staying healthy, taking care of our things and planning in advance. It's a wonder what just taking your vitamins and seeing the dentist for your exams will save in the long run!
• So after my ATM run, we have $40 a day for one week. The bills are pinned together and I stick a sticky note on them to make sure every day is accounted for. Once I've done that, I go to my calendar to figure out my "home" days. These are days that I'm not going out, no matter what. We don't make plans, we don't agree to anything. If we don't leave, we don't spend. Those days are days that I automatically know I'll have an extra $40.
• Andrew and I keep diligent tabs on our gas. Gas is very expensive right now and we combine trips like crazy. Andrew also has a motorcycle that he rides every day the weather permits. It uses far less gass and on the off chance I haven't been paying attention to my gas gauge, I have a second car that may be more likely to get me where I'm going. Gas is tricky for us because using cash requires me to go IN to the gas station with toddlers in tow. Generally I'll try to stick to one tank a weeek and combine my trips, and then I'll fill up on the weekend with whatever cash we have left over.
• The $40 for the day is for groceries, gas and incidentals. I try to plan nutritious meals that make a LOT of food, and freeze what I can. Learning to freeze food has become invaluable because on the days I've already borrowed from myself or am not prepared to cook, I have a "free" meal all ready to go. Generally I go out once every two days, so I usually have a little extra to spend on food, but I try to stick to the $40 if I can, because the goal for me is to spend $20 or less per day so I can really set aside a little extra cash by the end of the week.
• I make a list and I stick to it like CRAZY. That is very, very hard for me. I love to shop and I love to spend. A cash budget for me is like not gambling in Vegas. Who does that? I've figured out that the one thing that has me going back to the grocery store is MILK. And once I'm there for milk, I'm there for 20 other items. Learning to control the milk intake around here is saving me money in ways I never though possible, because I'm not running to the store for "a few things" every day. The girls get their recommended servings in the am and then we switch to water for the day until dinner. I can drink almost a gallon a day, so forcing myself to drink water instead has really slashed out budget!
• Weekends are hard. We like to go out as a family and we always end up spending money. If we have visitors in town, all bets are off and we have FUN. The cash budget tends to go out the window and we pick up where we left off once we're back to normal. But if it's just us tooling around town on the weekend, we try to stick to the budget. Andrew is incredibly understanding and enjoys the challenge of making our weekends frugal and fun. We don't go out to movies often, and we rarely pay for a sitter. The kids come with us wherever we go and they're expected to behave well enough to be invited back again. We have a pretty long list of free and fun activities in the area and we make sure that the girls understand that it's not about what you're doing, but who you're doing it with and the attitude you have. When you're trying to stay under $20 a day, small things like a chocolate shake on the way home become big things, and the art of living is enhanced by finding pleasure in small things, isn't it?
• At the end of each day, any cash that's floating around is collected and added back to the pot. At the end of the week, it's put into savings at the same time I withdraw our budget for the following week. When you have $40 a day, you know where every dime, quarter and dollar bill is, so rounding up the leftover cash is never hard. I think it usually comes out to about $80 that I can put back into savings. When you combine that with your regular contribution to savings, it adds up. I realize that some people don't have a regular contribution to savings, and some months we don't either, so that little extra here and there makes a big difference!
• I like my cash budget because when it comes down to it, cash talks. When I'm holding it in my hands, I re-examine every penny I'm about to spend. At the end of the day, I get so excited to put $20 or $40 back in the pot. I don't feel like I'm depriving myself so much as really conquering a weaker side of myself. It's just so fun to challenge our whole family to think hard about what money means and what spending wisely can do for the whole team.
• There are months when the cash budget is just not feasible, and we don't sweat it. When we travel, we stick to the cards and try not to limit ourselves. We don't take a vacation until we know that we're free to really live it up and the sky's the limit. We don't go on date nights until we know that the entire menu is up for grabs. When we go shopping for clothes, it's usually without a budget, and we don't have to feel guilty because we can look at each other and say, "Oh yeah, we really deserve this one!"
• I also appreciate that I can look at my budget and gas and groceries are totally figured out, just like the bills. We don't have to guess about what's available to us, because I know that it's $280 a week, plain and simple. Whatever's left after the cash and bills goes straight to savings.
• Part of what I really like about our budget as we have it now is that it forces me to examine what motivates us. Knowing that I need to stay in a few days a week leaves me so much more open to spending the entire day on a project with the kids, planning an hour long picnic in the living room for Wednesday, saying "no" to a playdate because it just won't jibe with our greater plan, etc. I love knowing that those days are sacred to us for so many reasons. When it comes to family, nothing can be nicer than a day of nothing, especially with little ones. The days of nothing are over way too fast! And at the end of the day, we may have eaten something from the freezer that I really wasn't in the mood for, but the food wasn't important in the first place. It's only there to get us from one place to the next. What's important is that we spent a day enjoying a simple life AND I put $40 back in the pot!
• We do borrow from other days if the need arises. If I know I really need a trip to the store on Monday and my calendar is totally clear for Wednesday, I'll take $80 to the store and mark Wednesday off as a do-nothing day. If Andrew knows we're not going out on Thursday and he really needs gas on Tuesday, he'll take enough to fill the tank all at once. It's sort of like a puzzle to us, and when you're a stay-at-home-mom, anything can entertain you!

So that's the gist. I've found that the cash budget has made us more honest and forthcoming to ourselves and the people around us. It's amazing how those four little words open up so much between people. Having the courage to say, "I can't afford that" really brings about a sigh of relief from so many sides. Most of us can't afford things here and there. Some of us can't afford much, much of the time. Being willing to expose the fact that you're on a budget seems to be something that people appreciate. Whether it's totally voluntary like in our case, or something you do because you absolutely need to make ends meet, people love to hear that they're not alone. I really wonder how much less people would suffer if they realized that the people around them are suffering just as much. I've found that just saying, "It's not in the budget" suddenly makes me more relatable and somehow understanding. I love that. A person should never feel like they have to measure up in terms of money. It's all so fluid anyway, and you never really know when it could be totally gone! My best advice is to treat it like it's slipping away and be very, very careful. Isn't that the way we should treat anything of value?