January 2018 No Credit Card Challenge

Part of our kick off to a year of healthy personal finances includes eliminating your dependence on plastic! Using cash is getting harder by the day. The media is bombarding us with the use of digital currencies (Heard of bitcoin yet?? That’s a whole other topic to discuss!) and the electronic means of completing every money transaction imaginable. I suggest every January you get back to the basics and start your year off using cash!

I am not saying stop your automatic savings or investment plans or stop your autopay bills. I am saying freeze your credit cards and debit cards for the month and use cash on your variable expenses like dining, groceries, gas, or gift shopping. The fixed expenses you should pay for like you normally do, likely by autopay or electronic transfer.

DINING

Dining can be tricky when you are working late or shuttling kids to their different activities, but you need to PLAN AHEAD here. Plan on Sunday of each week what you will be eating for lunch and dinners and stick to your plan.  Don’t be lazy. Know that you are making a good choice to avoid eating out when possible; it’s a good choice for the health of your body and your pocketbook.  You already know this so just DO IT!

GROCERIES

I have found, for my family, that groceries hurt our budget on a regular basis. When there are two or more people who occasionally buy groceries, it is easy to go over budget. Use cash for this expense, and you won’t overspend or double up on items that may be on someone else’s list in your home.

Use the envelope system, suggested by Dave Ramsey, to put a specified dollar amount in the envelope at the beginning of the month.  Plan the day you will go to the grocery store during the week and try to avoid stopping in at any other time. You will be forced to be aware of everything you put into your grocery cart, and you will have to put back a few items when there isn’t enough in the envelope!  Swallow your pride and put the items back!

GAS

Gas is an expense where we just assume when we run out we need more. Consider only spending a certain amount on gas and using an alternate form of transportation when you run out of money. Alternatively, avoid making that extra trip for something you could get later when you are already out. We can reduce this expense if we use cash. Think of all the time we waste running around, plan errands and the routes you take to get them done.

GIFT SHOPPING

Hopefully, after the holiday you won’t have much gift shopping to do but for those with birthdays, or other special occasions in the coming months, use cash to purchase the gifts. It is very common to have an amount in mind that you want to spend and to justify going over budget a couple of dollars when we buy gifts. We also forget to plan for wrapping costs (gift bags are outrageously priced). Set your spending amount to include any wrapping or card costs and use cash, so you don’t overspend. Don’t forget about the tax.

 

Do you accept the challenge? Do the no credit card challenge for January and see how you feel at the end of the month. You can do it!  You might be surprised how much you overspend in these categories. Get control of your spending, and you can live without guilt about your finances.

If you have children, use this as an opportunity to have them learn how to count change and know how much change to expect back from the dollar bills you use. These lessons are invaluable.  Use the kids as your motivation. I accept the challenge and will keep you posted on my results!  I would love to hear about yours too!

 


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