Using Cash to Stay on Top of Expenses

The 1st month of marriage, we voted that I would look over the finances and make all household purchases.  Trusting that I have budgeted for my own personal finances for years, I thought “What’s another person to add to the equation?  Should be a piece of cake, right?”  Balancing out the account, every month, consisted of checking the bank account, calculating against our income and coming to the realization that we did not stay within our means–  dreadful!  At the time, we only started with 1 income and I was not the one bringing home the bacon!  So not only did I not add, I also took away more than we had available. To say the least, joining financial forces came with more challenges than I had anticipated.

In those first few months, here’s what I realized: big purchases were not even the problem, but the tiny ones that ate away at our account with numbers multiplying like rabbits: $6.98, $2.09, $14.56, and pending…. literally, felt like it would not end!  After some months of a failing balance sheet, I thought [something needs to change].

We incorporated cash allowances into our budgeting.  This allowed us to purchase freely within our own set limitations.  Cash allowances were set for our groceries, outings, and household products. This helped us gauge how much we really eat (which is, legit, most of our cash budget), identify cost of hobbies, detergents, toiletries, etc.  We literally went from having at least 20 tiny transactions to 2-3 lump sum cash allotments that umbrellas all of the tiny purchases.

The cool thing about having cash allowances  is that, budgeting is so much more simpler because you don’t have to constantly balance a sheet. The less activity you have going on in the bank account, the less you have to go back to the sheet and figure out the array of tiny transactions.  It’s much cleaner and precise.  This also helps track uninvited expenses, which is definitely a big plus!

After a year later we continue to use this method and no longer dread budgeting or making many small purchases.

If you had similar budgeting nightmare stories or if this tip has helped in anyway, please share in the comments below. 😉

For more on budgeting, check out How to Create a Successful Budget

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