Saturday, September 7, 2013

Dave Ramsey's Cash System

My husband and I follow Dave Ramsey's Cash System. The basic concept is that you use cash for all (or most of) of your spending. It prevents you from over spending or going off budget.

 There are obviously categories of your budget that you can't use cash for (or you can, but it's vastly more inconvenient) such as Rent/Mortgage, Utilities, Bills, Fuel, etc. But I'll show you the basic concept and what works for us. 

First thing's first. You MUST have a written budget. That is the foundation of the whole system. If you don't have a budget yet, you can learn more about that HERE or HERE. This is the budget we use:
Click Here for this Printable.
 Next you need to decide the categories for your Envelopes. We include the following categories:
  • Entertainment
  • His Clothes
  • Her Clothes
  • Kids' Clothes
  • Cleaning and Alterations
  • Childcare & Sitters
  • Toiletries
  • Cosmetics & Hair Care
  • Furniture Fund
  • His Pocket Money
  • Her Pocket Money
  • Restaurants
  • Groceries
You can see all of these categories in my Envelope System except for "His Pocket Money" my husband keeps that with him in his wallet.
We sit down the day before we get each paycheck and fill out our Budget Form. We decide what (and how much) the debit card will be used for and how much cash will be used. We only use our card for rent, utilities and gas. Then, the day we get paid, I go to the bank and withdraw the allotted amount of cash that we budgeted and divide it up into the categories. Once the money is gone for that category, it's GONE!! If we don't use all of the money from a category, it simply stays put and rolls over to the next month and it's there for when we do need it.
 


5 comments:

  1. Thanks for sharing! Where did you get that wallet? I need something to hold the money in better than actual envelopes in my purse!

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  2. It s a retired coupon clutch from the Thirty-one company. If you go on ebay you can still find them.

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  3. Where did you get the dividers from? This is brilliant! LOVE Dave Ramsey

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  4. To be honest I need some help how in the world do I fill this MO they budget form out??

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    1. You start with your total monthly income. Each budget category has a range of how much of your income should go to that category. Start with fixed expenditures (mortgage/rent, utilities, loan payments, etc) and then distribute the rest of your income to the different categories. The idea is that every dollar of your income should be accounted for. It doesn't mean that you would spend, say, $30 every month on clothes, but it means that you have put aside $30 every month for clothes so that when you need to spend $200 on new clothes you have the money on hand. The vast majority of your money stays in the bank earning interest and you only take out a certain amount of funds for every day spending.

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