Our Cash Budget
When reading about our various cash-only adventures, people sometimes asked how we budgeted our money to last the whole month. There are probably many different ways to manage your money when adopting a cash-only lifestyle, but here’s the method we chose: Before we began, we created a written budget that showed all of our monthly income, and then listed all of our savings goals, monthly bills, and spending categories, as well as how much we wanted (or needed) to spend on each.
For example, we listed “Braces- $200″ as a savings goal because that was the amount of money we wanted to save each month in order for me to get braces eventually. “Gas/Electric- $300″ was listed as a monthly bill, because that’s typically what our utility company charges us. “Groceries- $350″ was listed as a spending category, because that’s the limit of what we wanted to spend each month on food. We made sure to balance the written budget so that our savings goals, monthly bills and spending categories wouldn’t exceed our monthly income.
Every paycheck, we took three steps:
- We transferred all the money needed for savings goals (retirement, future travel, braces, cushion fund, etc) into savings accounts.
- We withdrew enough cash to cover our shopping for the month, and separated that cash into envelopes- an envelope for grocery money, an envelope for drugstore purchases, an envelope for haircut money, etc (this is commonly called “the envelope system,” or “envelope budgeting.”
- The money left in our bank was used for monthly bills, which we paid using our debit card as the bills came due.
Now, this 3-step process looks pretty simple, but going cash-only was a lot harder to put into practice than we originally thought. I’ll admit, I wasn’t fully prepared for just how hard it would be to make the switch from credit cards.
The Addiction to Credit Cards
As someone who routinely used credit cards to make purchases, I had forgotten the logistical issues inherent with using cash: the frequent trips to the ATM, the careful allocation of cash into various spending categories at the beginning of each month, the panic at the cash register wondering if I brought enough cash with me. After switching to credit cards over a decade ago, I think I had assumed that it would be easy to switch back to cash if I wanted to, and that the only reason I didn’t was because of the benefits of cash-back credit card rewards. After all, since I paid off the credit cards in full each month, I wasn’t dependent on them, right? This logic reminds me of a friend of mine who smoked cigarettes and said, “I’m not addicted because I could quit any time I want to.” The response in both cases is, “Uh-huh. Get back to me about that after you’ve tried.” We simply can’t know the level of our addiction until we try to kick the habit.
And credit cards are a hard habit to kick because it’s incredibly convenient to use them- you never have to worry if you have enough money in your account to cover the purchase, you have over a month to figure out how to pay for the purchase, and you don’t have to make detours to an ATM (well, except for when you find yourself at one of those lunch joints with a hand-written “cash only” sign taped on the cash register). My husband and I loved the convenience of credit cards, but nonetheless we found ourselves embarking on a three-month cash-only challenge. You might remember from reading Part I of my Cash-Only Challenge Series that we were initially reluctant to go “cash-only”- we were essentially forced to do it so that our credit reports reflected $0 debt for an upcoming house refinance. But when faced with the reality that we had to temporarily wean ourselves cold-turkey from our credit cards, we did try to embrace the concept, and committed to trying out a cash-only lifestyle for a full three months. I’d been intrigued by the case made in The Money Saving Mom’s Budget
Now the three months are over and it’s time for me to report back on the ultimate question:
Was the Cash-Only Lifestyle Worth It?
Stay tuned for Part VI where I’ll answer that question and disclose whether we’ve stuck to the cash-only lifestyle!
Want more? In Part I: The Accidental Players, I explain how we wound up in this Cash-Only Challenge despite having no interest in a cash-only lifestyle. Part II: Grocery Budget Jitters tracks how we weaned ourselves from credit cards and took the plunge into using cash. Part III: The Roller Coaster, tracks my logistical acrobatics (and occasional panicked moments) as I attempt to cover all of our month’s expenses before our cash runs out. In Part IV I report back on taking our Cash-Only Challenge on vacation with us.
Interested in doing a Cash-Only Challenge yourself? Check out Crystal Paine’s book, “The Money Saving Mom’s Budget” (which I reviewed here) and learn all about it. In her trademark upbeat style, Paine lays out the blueprint for a cash-only lifestyle.
has replaced vinyl diaper covers, 
have replaced diaper pins, and thank goodness 
have replaced toilet dunking. Numerous companies have taken advantage of these new technologies to create cloth diapers that are convenient to use, easy to wash, and completely adorable. If you’re interested in using cloth diapers on your child, here’s an overview of the different types of cloth diapers that are available. I’ve used links to Amazon product pages so that you can see pictures of the diapers I’m describing, as well as read reviews about them and find out pricing.
” style of diaper (also called, “AIO”). An All-In-One is a one-piece leak-proof cloth diaper that Velcros or snaps around the baby. They have the look and function of uber-stylish disposable diapers, but instead of throwing the diaper out when you change your baby, you throw the whole diaper into your diaper pail and wash your diapers every 2-3 days. All-In-Ones are so convenient that they tend to win over spouses, grandparents, babysitters, daycare centers, and anyone else who might not be initially enthusiastic about cloth diapering. They come in 
, and use super-easy 
or 
closures. Depending on the brand, they are either “one-size,” meaning they fit from birth to potty training, or sized.
(cotton interior w/microfiber flap for optional stay-dry)
(sized, fold-out flap for easier washing, stay-dry microfiber interior)
(one-size, fold-out flap for easier washing, stay-dry minky microfiber)
(microfiber)
(sized, fold-out flap for easier washing, cotton interior, stretchy sides)
(cotton interior)
(sized, microfiber interior, tunnel design for easier washing)
(one-size)
(one-size)
(sized or one-size)
(one-size, choice of cotton, microfiber, or disposable snap-in insert)
(one-size, choice of cotton, microfiber, or disposable insert) 
(sized, choice of cotton/microfiber insert or flushable insert)
are the cheapest option. A prefold is a rectangular cloth that you place on your baby, secure with a 
, and then cover with a leak-proof 
. You don’t change the cover every time- just the soaked prefold- so you only need approximately 1 cover per 4 prefolds. Prefolds and covers can be washed together in a washing machine, and dried in a dryer, though line drying the covers will help them last longer. Prefolds are the type of diaper used by diaper services, so if you aren’t interested in washing cloth diapers yourself, you can subscribe to a 
(Prefolds and Covers)
(Prefolds)
(Covers)
(Covers)
(fitteds and covers)
(fitteds and covers)
(fitteds and covers)
(wool covers)
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