Live Debt Free

Pay off debt. Save. Give. Live your mission.

Cash Envelopes For Couples

by //

Using cash envelopes can be a huge financial blessing for singles and couples. Many people steer clear because they’re unsure how to make them work in their relationship.

Here are 4 great tips to help you get started. My goal is to get you to use them because they have saved us money, time, and financial stress for years.

How do they save money?

You can argue cash envelopes won’t work for you but until you try it your point is moot. Keep an open mind, listen to our experience, and consider the benefits to your financial health.

To show how cash envelopes save money I considered pointing to some Ivy League study, but I’ll keep it existential since it’s what I know.

Using cash sets limits in each category. When the money in each category is gone, it’s gone. You preconceive how much you’ll spend rather than just spending whatever you have. I call this “telling your money where to go instead of wondering where it went.” Define what categories work with cash and create those envelopes. We have five: groceries, miscellaneous, clothing, dining out, and entertainment. We each get $300/month total; when it’s gone, we stop spending. If we don’t spend it all, we carry it over and withdraw less for next months envelope.

Using cash hurts more. Try it and you’ll see. I still remember the first time we took our grocery envelope to the store. Each item placed in the cart went through a rigorous screening rather than tossing in whatever we wanted. Things we needed went in regardless; things we wanted were added according to how much was already spent. Turns out we didn’t want many of them bad enough to spend the cash.

It made a big difference in the way we shopped; and it still does.

Cash envelope tips for couples

Perhaps you know cash envelopes would save your family money . . . if only you could figure out how to make it work with your spouse.

This is how me and Betsy have made it work for us:

1. Direct deposit paychecks – do this so you don’t have to go to the bank to deposit your checks every time you’re paid. It saves time, gas money, and hassle. If your employer doesn’t offer direct deposit, ask them to; I did this once and the employer obliged.

2. Define cash categories – what categories work best for cash in your situation? As mentioned above, we use cash for groceries, miscellaneous, dining out, entertainment, and clothing so we have 5 separate envelopes. We each get half the total money allotted for all envelopes each month.

3. Withdrawal once per month – now that you know how much cash is needed for a months worth of cash purchases, withdrawal that amount once per month. This saves gas money, trips to the ATM, and ATM fees (you’re not stuck using a machine that doesn’t belong to your bank).

4. Divide the money – does one spouse do the majority of the shopping and purchasing or is it divided equally? Figure this out and distribute accordingly so you each have enough for all categories.

We used to give Betsy most of the cash for everything but miscellaneous (we both get $100/month for misc. regardless) because she did most of the shopping. Now we’re together most of the time so we split it down the middle. It works incredibly well for us; do what works for you and don’t stop until you find what works. If your situation changes, change your system accordingly.

Give it a shot

Use our experience and tips to test this out for your situation; what do you have to lose? Most folks I know save a lot of time, money, and hassle by using cash envelopes together.

I dare you to prove me otherwise.

*******

Save Money on Black Friday

by //

Marketers are brilliant, they have convinced us that spending less money is the same as saving money. If you’re like most American’s you believe you save money when you buy things at a discount – on sale. (Thank those brilliant marketers for that thought.)

Now let’s think critically about it.

Spending is not saving

Let’s be clear – spending money is NOT saving money. When you spend money on anything, even with discounts, you are not saving money… you’re spending it.

Saving money means you’re choosing not to spend it. If you buy something at a discount, you don’t save, you simply spend less.

Rather than spending this year, sleep in and save money by skipping Black Friday sales choosing instead to fund your savings account with the difference.

Needs vs. wants

Is there anything wrong with spending money on Black Friday? You’ll have to answer that for yourself, but let’s address a few distinctions.

  1. Do you need what you’re buying? If so, then waiting for Black Friday means you’re planning ahead so you can spend less than normal.
  2. Do you want what you’re buying? If so, make sure all your needs are met, you have previously saved for the item, and have discussed it with your spouse or accountability partner.

So is there anything wrong with spending money on Black Friday? Draw your own conclusion but mine is simple – you can shop Black Friday to get deals on things you need or want as long as you understand the above facts and meet the mentioned criteria.

Choose to save instead

With the vast majority of your media consumption encouraging your to spend I’m happy to give you a healthy opposing option.

Rather than spending, make the positive decision to save. You already know which banks I recommend for checking, saving, and debit card rewards… so open an account of your choosing or fund a savings account at your existing bank.

After all, do you really need what you think you need? Do you really want the responsibility that comes along with more possessions?

Less is more

Betsy and I never considered spending a dime this year. Not because we don’t want anything, it’s more accurate to say we’re learning more possessions means more responsibility. Less money spent on possessions means less maintenance and/or debt. That in turn means less time spent working to pay for the possessions and debt, and more time for other things.

What other things? For us it means more time for love ones, more time for passionate work, and more time for ministry.

How would you focus your time if you had less debt and fewer possessions to maintain?

Gifts and purpose

God gives each of us spiritual gifts to be used for His glory. He also gives us purpose (or calling).

What are your gifts? What is your calling? It’s okay if you don’t know, but it’s not okay if you have never pondered the thought.

“As every man hath received the gift, even so minister the same one to another, as good stewards of the manifold grace of God. If any man speak, let him speak as the oracles of God; if any man minister, let him do it as of the ability which God giveth: that God in all things may be glorified through Jesus Christ, to whom be praise and dominion for ever and ever. Amen.” I Peter 4:10-11

Rather than spending time pondering Black Friday purchases, think about how your time, money, resources, and gifts can be spent serving the Lord of glory. He’ll ask you about it one day, why not have an answer ready?

**********

Surviving the Holidays Without Credit Cards

by //

The holiday season is right around the corner, and with it will come long shopping lines, and for many, large credit card bills. However, bringing out the credit cards simply to afford the holiday season is a big and costly mistake. Paying high interest rates on a maxed out card until next spring simply to get your 8-year-old a great prepaid cell phone stocking stuffer is ridiculous. Instead, consider the following tips to make your holiday season enjoyable without needed to constantly whip out the plastic:

1. Learn discipline

You won’t make it through the holiday season debt free unless you learn to keep yourself under control. While it is fun to shop and cook for loved ones, it is also costly. Don’t let yourself get carried away with buying the best gifts for every one you’ve ever come into contact with – this goes for your kids too. Make a reasonable shopping list, and stick to it. If you don’t shop with discipline, you will overspend and make last minute, unnecessary purchases that will only cause you to go overbudget and most likely rack up those credit cards.

2. Create an accurate budget

When most people begin planning for their holiday shopping, they only think of gifts and then give themselves one solid amount for those gifts. This is a sure fire way to set yourself up for overspending as budgeting just for gifts leaves out other holiday needs such as travel and food – both of which are integral parts of the holidays. When creating your budget for the holidays, be as accurate as possible. Include all major food purchases, gifts, and any travel expenses that will be needed to keep yourself from swiping those credit cards when funds are low.

3. Start preparing now

The sooner you start shopping, the better. Most people don’t have all the funds needed to complete holiday shopping in one month alone. By spreading out your shopping, you will give yourself more time to find the right deals and you will be less likely to charge any purchases as you won’t be spreading yourself so thin financially.

4. Shop smart and make your own

Always remember to shop smart. Your kids don’t always need the biggest and best; an inexpensive alternative can provide just as much entertainment and enjoyment. Shopping online can also greatly reduce shopping expenses. Certain items, such as electronics, books, and movies, can be purchased for significantly lower prices if bought online. For foods items, consider local farm markets or discount grocers to buy the fix-ins for your holiday meals. Alternatives to department and big box stores can provide huge savings without sacrificing quality so don’t be afraid to shop in them when trying to stay within your allotted budget. Making your own gifts is another great way to save money. This guide teaches you how to make all your own homemade cleaners naturally.

5. Delegate and share expenses

If you realize that your extravagant Thanksgiving meal is what is always sending you over budget, then ask others to help out. Simply request that everyone bring their favorite side dish to reduce costs. When holding holiday celebrations, there is no harm is asking others to help. It will actually make the event more enjoyable for everyone as it will be more personal, and it will be more enjoyable for you as it won’t be as stressful and won’t require as many funds.

The holidays are meant to be a time of joy and giving, not one of financial instability and anxiety. Avoid putting yourself in the red by steering clear of the credit cards trap this holiday season. You don’t need to spend a lot to have the best holiday season. In fact, doing so will only make the season more stressful.