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  • Modified Cash Spending Experiment: March 2012

    As I mentioned last month, I’ve been thinking about a modified “all-cash” spending experiment, and contemplating ways to implement one.

    My husband and I are both pretty disciplined when it comes to spending. We rarely spend frivolously, and we save a good amount every month. So the only areas where we could realistically tighten spending without becoming miserable about our living conditions is my domain: grocery and drugstore spending.

    While I cook regularly, meal-plan weekly, and don’t spend frivolously, I’m not as disciplined in restricting how much I spend on groceries and toiletries as I could be. But I have good reasons:

    I buy organic dairy for the kids, and RBST-free dairy for my husband and me. {Thank goodness for Trader Joe’s and their low everyday prices!} I buy most of my meat at Whole Foods, because even their non-organic meat is hormone- and antibiotic-free. I keep a close eye on the “Dirty Dozen” list of produce that retains the most pesticides, and buy those in organic varieties.

    Thanks to food allergies, I’ve become an obsessive label-reader, and that in turn has caused me to notice ingredients in foods that don’t seem necessary. So when I don’t have time to cook or bake, and when my kids prefer store-bought items like crackers, I’ll pay extra for the brand that has the most “natural” ingredient list.

    These are health choices that I’m content with and have no intention of changing. Still, I think I could reduce our spending somewhat. I took a look at the charges on my credit card and discovered that I spent $594.15 and $558.29 in the last two months. That’s actually quite a bit less than I was thought it would be, but it makes me think that I could get our spending down to $500 per month.

    So I’m going to try something new in March, and switch to cash for my groceries and drugstore expenses. I’m taking $500 cash and making it last the whole month. I may not be a happy camper by the end of the month, but then again, I might be thrilled.

    I’ll let you know how it’s going once I get into it!

    Contemplating All-Cash Spending Experiment v.2

    A lot of people claim that you spend less when you only use cash, including bloggers I admire like Crystal of Money Saving Mom. Four years ago, my husband and I attempted the shortest-lived all-cash experiment ever, and I gave up on an all-cash system for us. After all, we do just fine without it – we are still very conscientious about our spending, save money every month, and maximize our credit card rewards.

    But yesterday, Josie at Southern Cali Saver wrote about how the envelope system works for her. With the envelope system, each envelope holds the cash for a category in your budget.

    It got me thinking about trying a modified “some-cash” spending experiment – maybe just for the categories where I could use a little more discipline, like the groceries and stockpiling. I tend to just grab the good deals when I see them, without worrying about whether I’m overspending for the month (on the theory that it all evens out). But maybe if I were more conscious of exactly how much I’m spending, I could save enough money to make the effort worthwhile.

    I’m going to have to put some thought into this – I don’t really know which categories I would switch to cash, and it’s been so long since I’ve had a formal budget that I’m not sure how much to budget pet category. But it’s definitely something I’m going to think about and revisit in the next few weeks.


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    Trick Yourself Into Spending Less

    I’ve discovered that sometimes I just have to play mind games with myself to achieve my financial goals faster. For instance, we don’t live paycheck to paycheck, since we don’t need our next paycheck in order to be able to pay our bills.

    But usually I act like we do.

    I tend to keep only what we need to pay the current bills in our checking account. I tuck as much as possible away into savings accounts, and we don’t touch that money unless we really need to (such for our bathroom remodel earlier this year). It does mean that sometimes I find myself passing up stockpiling opportunities (that would save us money in the long run) because I’ve been spending on other things and even though the money for stockpiling is there, I don’t feel like it is.

    Sometimes I think I go overboard with this sort of thing, and stress myself out over “not” having money when that’s really not the case. But it works for me, because it helps me keep our spending down, and that keeps our savings up.

    Do you have any tricks for spending less?

    Proof That Tiny Amounts Add Up To Big Money

    When it comes to saving money, you hear people say “it’s the little things” and “little things add up” all the time. In fact, David Bach became famous for coining the phrase “The Latte Factor” in reference to money that people spend on things like coffee without thinking much about it.

    But when you’re trying to reach your “big picture” financial goals, it can be hard to see how $2 here and $5 there is going to help erase your $20,000 credit card debt or $100,000 mortgage.

    Whenever that happens, I recommend thinking about the Box Tops for Education program. It’s a marketing campaign by General Mills – selected products have a “Box Top” that can be cut out and sent in to General Mills for a 10-cent contribution to a participating school.

    The average school earns $574 in Box Tops per year – that means an average school redeems 5,740 Box Tops! Side note: The highest earning schools get $50,000+ from Box Tops, but after discussing this with our Box Tops coordinator, I’m guessing that these schools won a contest, and didn’t actually redeem 500,000 Box Tops.

    My son’s school earns over $2,000 in Box Tops each year – that’s more than 20,000 Box Tops at 10 cents apiece. Each individual 10-cent label may not seem like much, but add them to all of the others and it really does add up to real money. It’s money that our cash-strapped school can put to good use for the students.

    And similarly, every dime or dollar that we save for ourselves adds up to real money that we can use to achieve our financial goals. So instead of getting discouraged, get inspired and look for all the different small amounts that you can pool together. Before you know it, you’ll have a meaningful amount of money to help you reach your goal.

    P.S. If you know a child whose school participates in Box Tops for Education, save those Box Tops for him or her! Their school can definitely use the money 🙂

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    Saving Money With Lower Replacement Costs

    My oldest son’s soccer games are always one of the highlights of my week, but this past weekend, I found myself tending to his bloody nose instead of enjoying the game. That meant I didn’t see the ball when it came hurtling toward my head. Fortunately, it didn’t hit my son. Unfortunately, it pounded right into my sunglasses on top of my head, giving me a nasty bump and breaking my sunglasses.

    I’ve been having trouble finding a replacement pair I like, and that got me thinking. I bought the sunglasses at least three years ago at Macys for less than $25. While I’m sad that they’re broken, I’m not devastated. If they had been $100 or $200 sunglasses, I would have been really upset.

    I realized the same applies to our cars. We buy relatively inexpensive cars, and don’t obsess over every dent and scratch. I’m sure we’d feel differently if the car cost $100,000 instead of $25,000.

    There are things worth spending money on, certainly. And which things are worth spending money on varies by individual. I wouldn’t judge someone who spent $200 on sunglasses and loves them (well, as long as he or she could afford them – I would frown on the purchase if the money isn’t there!). I think the lesson here is simply that, whenever possible, it’s best not to spend a lot of money on something that’s likely to need replacing anyway.

    I definitely don’t want to spend more than $25 on new sunglasses, since who knows when/if I’ll get nailed by another soccer ball. I went to Macys and discovered that they had replaced their sunglasses section with a Sunglass Hut kiosk. Ugh. I’m hoping that was just the store I happened to be at, so I’ll head to a different store tomorrow with the $10 off $25+ purchase coupon.

    How to waste hundreds of dollars in 2 seconds

    I hate to tell this story, but I’ll admit it anyway: I crashed my car last week. It was a very minor crash, in which I smashed the front bumper into the edge of the garage while turning in. So minor that it didn’t even occur to me until now to consider the integrity of the car seats – and so minor that I’m not even considering replacing the car seats.

    The only way in which this little accident was not minor was in the wallet, or savings account to be more accurate. It cost over $500 to replace the bumper, and it pains me horribly to think about. After all, we worked really hard to save up that money.

    But.

    We had the money. All that hard work paid off so that when we needed the money, it was there.

    I am continuously grateful that my husband and I share financial priorities and goals and work hard at them so that when we do need money, we have it. We had it when our son was hospitalized, we had it when our bathroom needed to be remodeled, and we had it when the car needed to be repaired.

    Still, it pains me that my stupidity impatience enthusiasm caused us to essentially waste hundred of dollars.

    I can only urge you (and myself) to be really careful when driving so as to not waste (more) money!