The Cash Experiment

[mik3cap]

I've just finished making a budget for myself for 2008, and though it's a bit loose around the edges, it looks like a decent plan for my finances for the year.

The next step of my plan is an ambitious one... I've decided that I'm going to attempt to live exclusively off of cash and see how that goes. I created four spending categories - Dining, Entertainment, Groceries, and Life. I'm allocating a certain amount of cash to each category per week. At the beginning of the week, I will go to the bank and withdraw the requisite cash, minus anything left over from the previous week. So if I manage to control my spending, the remaining cash will roll over into the next week. All I have to do is keep track of how much I spend in the four categories; if I run out of cash in one category, that's it, no more for that week. We're basically talking spending caps.

2007 was a pretty wild year of unrestrained spending and general fiscal irresponsibility. It was extremely enjoyable, and I think I really needed to do it after being so cash-poor and hermit-like for so many years. But now that my goal of being debt-free is finally in sight, I find myself wanting to build up my financial power as quickly as I can. I don't know if I want to be in IT for the rest of my life; if I want to go to school some more, or go down another career path, or do any of the things I want to do in the future, I have to start saving money for those things now. Getting a handle on my money is the first step in focusing on what I want to do with my life. (i.e. Step One: First, We Need A Lot Of Money)

Comments

[pixiesnakes.livejournal.com]

I have been doing the same thing with my spending, cash only. It has made a HUGE difference, and I'm finding that I'm spending less. It is just too easy to swipe the plastic and not balance the account. With cash, spending is very visible and I really have to think before I'll hand it over.