Monday, December 8, 2008

Your Personal Pie

How do you fund your personal purchases? Do you pay with a card or do you carry cash?

This past year, both She and I have discovered the benefits of paying for personal purchases with cash. As I've previously noted, our means of budgeting is to deposit a lump sum into individual accounts to pay for the expenses we are responsible for. The majority goes to her, as She is kind enough to do most of the shopping for groceries, clothes, and household items. However, her personal money is also included in the lump sum that is deposited at the beginning of each month, increasing the chance of being spent without noticing.

I dealt with this issue when we first began our budget, quickly realizing the ease of overspending when such purchases were placed on a card. As such, I now pull my personal money out as cash at the beginning of the month as my Personal Pie (or Adult Allowance), which eliminates my ability to unknowingly overspend. I encouraged her to do the same, and it has made a world of difference.

Consider moving to an all-cash payment system for your Personal Pie. Withdrawal the full amount at the beginning of the month (this is key), and use it for designated expenses. You'll find yourself remaining within your budget and likely see a shift in your spending habits.

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