Life After Credit Card Debt – Spicing Things Up a Little

Hi everyone. Tricia here with another update. I cannot believe that summer is almost over and school will be starting soon. Oh my…how time did fly.

Things in our financial arena could be better right now. I was a little more relaxed with tracking our finances (ok, I was lazy and didn’t keep a watchful eye on everything) and we spent more money than we probably should. We still do not have credit card debt, but we are not contributing to our savings account or paying off debt like I had hoped for this month.

This time, I’m not saying, “Hopefully next month things will be better.”

No, this time things will be better. How? We are ditching our debit card and the one credit card we use for cash back and pay off in full multiple times a month. We are going back to good ‘ole cash.

If you followed my story, I’ve mentioned many times that I do not like using cash. In fact, I’m still not crazy about it. But now that our credit card debt has been paid off, I have lost some motivation. Sure, we have other debt to pay off (student loans and mortgage), but I do not have the same passion to pay that off as I did with the credit card debt.

We need a challenge.

I thought about it for a while, and using only cash seemed to be a perfect fit. We’ll have a certain amount to use every week and once the cash is gone – there is no more spending. The cash will need to cover everything that is not normally paid via automatic payment or check. I have a feeling that it will lead us to do some creative things to make it through the end of the week at times. It should help spur our creativity and get our frugal juices flowing again. They were still there, just a little stale. Time to spice things up!

I’m pretty excited about the change in our financial routine. Perhaps it was time to try something a little different. I’ve always said that everyone should make their own recipe for financial success by taking tidbits from here and there. I guess I never thought about modifying that recipe every now and then just to keep things fresh. Perhaps this is just what we need right now in this stage of our lives

With that, I will conclude by saying that September will be a great month and I have to congratulate Beks – she just paid off her credit card debt. Woohoo!

Posted by Tricia on August 28, 2009 at 9:03 PM in Life After Credit Card Debt | 11 Comments »
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JustWriteACheck responded:
Posted: August 28th, 2009 at 10:01 pm
On a cash based system, how do you handle minor fluctuations & truly necessary expenses that you hadn’t budgeted? Things like an extra tank of gas (when you have to get to work, so not filling up isn’t an option), unexpected medical copay or prescription, etc.?

That’s my problem with a cash system, and zero-based budgets. I usually prefer to give myself a bit of wiggle room on each category, and have found it’s easier to give myself an ‘unlimited’ budget for necessities (like auto fuel, utilities, and medical expenses) and then stick with a strict budget (or cash) for more discretionary things (groceries, clothing, etc.)
Andrea responded:
Posted: August 29th, 2009 at 7:25 am
Do you have specific savings goals? I think that it’s just as much fun and just as motivating watching the savings balances go up as I did watching debt balances go down. We currently have a few savings goals – wedding, honeymoon, new house downpayment.
dcs responded:
Posted: August 30th, 2009 at 11:38 am
I used to do the all (ok almost all) cash thing. It’s not as inconvenient as you think, and definitely made you think about every purchase, but I thought it was kinda fun. I didn’t buy gas that way though. There’s more potential for impulse buying when you go into the station that out at the pump, plus I had a 5% cash back gas card, plus I hate the inconvenience. You really can’t overspend on gasoline, so that’s all I used the card for.

The only time I’ve had a problem paying cash was for car maintenance. They had basically no cash on hand and couldn’t make change – the service writer was walking around asking techs if they had cash in their pockets! Finally I said forget it, if you want to pay the MasterCard cut I’ll put it on a card. There was a noticeable sigh of relief.
Marie responded:
Posted: August 30th, 2009 at 4:33 pm
What a great idea! Can’t wait to see how it works for you in the next weeks! I might try that as well although I barely spend any money at this time since most of it goes it my debts…
Nicole responded:
Posted: August 30th, 2009 at 4:54 pm
My husband and I use Dave Ramsey’s FPU system for our cash. I got the wallet off of his site. The deluxe wallet is much better than the cheap one. It really helps keep all of the cash in proper areas so it doesn’t all get spent willy nilly:)
If you go on his site try his gazelle budget tool free for 30 days. It has really helped my husband and I create a budget that works for us!
John responded:
Posted: August 30th, 2009 at 6:28 pm
Cash is the best policy. I think your challenge is a great idea. I love how you say, “Things WILL be better”. Positive thoughts produce positive events. In response to JustWriteACheck, I think an emergency fund is a great way to deal with unbudgeted events. How does everyone else feel about emergency funds?
emmi responded:
Posted: August 30th, 2009 at 7:49 pm
It’s good to shake things up like you are doing, I think.

Also, I’ve noticed that for me spending is a floodgate thing. I’m terrible at holiday time, once I start buying things rather than saying, oh that’s nice, maybe I’ll come back for it if I think about it again… the spending really goes up. I have an all or nothing mentality, sounds like maybe you do too.

The other option is a system where you do a paper-based checkbook register kind of thing for every CC and debt transcaction, before you leave the store, but that’s tough, I think, even as nice as it sounds.
David@DINKS Finance responded:
Posted: August 31st, 2009 at 12:41 pm
Just one question – How much cash will you get each week?
Tricia responded:
Posted: August 31st, 2009 at 6:51 pm
JustWriteACheck – Our cash system is only for discretionary spending (groceries, dining, gas, household items, etc.). That’s where we were having trouble with spending money. If there is an unexpected medical expense (for example), we do have a small emergency fund in place to help cover those. But things like band-aids & tylenol we are working into our discretionary spending budget.

Andrea – We go back and forth on a savings goal. Perhaps that is part of our problem. We need to decide on one – stick with it – and roll with it.

dcs – We can overspend on gas. Going places is a big source of entertainment for us and since we live in a rural area – we can burn through the gas. We’ll still use the credit card we pay off in full each month since it’s important to me to have a definite paper trail when it comes to car repairs. It’s hard to dispute a credit card receipt.

Nicole – That’s interesting about the wallet. I didn’t know he produced one of those.

John – I was against emergency funds, but now I love them. I like having something there…just in case.

emmi – I think we are a lot alike. Holiday times are horrible for me. Your paper based checkbook register is an interesting idea. I’ll have to think about that one some more.

David – Our cash budget is $125/week.
Nicole responded:
Posted: September 1st, 2009 at 12:14 am
It’s actually on sale right now at his store Tricia, here’s the link:
https://www.daveramsey.com/store/budgeting-tools/envelope-systems/deluxe-envelope-system/prod210.html
John DeFlumeri Jr responded:
Posted: September 6th, 2009 at 1:07 am
My advice is to just say to yourself, “I’m not buying it” It’s a hard concept, but doing without is the most effective thing a person can do.

John DeFlumeri Jr, Clearwater, Fla.