We’ve been talking in my FPU class about the difference between paying for things with a debit or credit card as opposed to paying with cash. One family has already tried it out with their food budget. They made a trip this week to the grocery store with cash in hand and left the plastic at home. They found it much more challenging as they had to plan their trip and be much more careful about what they put into their shopping cart, but in the end they had all sorts of warm fuzzies because they knew they had not overspent.
I am a huge believer in using cash whenever possible! Mike and I use an envelope system. Every month I put the budgeted amounts of cash into each category (amounts that we decided on together, of course), and when the money runs out we’re done. With the envelope system we always know how much is left in the budget. It not only eliminates overspending, but it eliminates Mike having to ask me for money all the time!
Here is one man’s conclusion after experimenting paying with cash for a few months: