Cash or Credit? Which is easier for you to budget?

Budget101 Discussion List Archives General Budget & Finance Cash or Credit? Which is easier for you to budget?

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    • #281092
      Creditnet

      Do you manage your money better by using all cash, all credit, or a combo of both?

      I got my first credit card at 18 and I haven’t looked back since. I’ve only carried a balance once in my life, when I bought a new TV. It was not because I couldn’t pay off the TV in full, but I was paying no interest, so why not spread out the payments? Besides that, I pay off my bill in full each month on time. My spending is about the same each and every month, so I know I’m staying within my budget.

      DH and I recently moved to China because we’re fortunate enough to be able to work anywhere we’re connected to the internet. China is a cash-based society. The few times we have been able to use our credit card, we scratch our heads when our statement comes because literally, the charges are in Chinese, so it’s hard to figure out where we spent money! It’s been hard for us to adjust and budget our money now that we’re using all cash.

      With my card, I’d spend $30 at WalMart and at the end of the month, I could look at my statement and know that $30 of my budget went towards WalMart. But when I’m using cash, it’s easy to forget where my $30 went!

      So, what system do you use to budget your inflows and outflows, and how do you do it effectively?

    • #427659
      brchbell

      You are lucky that both you & DH are able to handle a credit card! very few can do that and to have both you able to do so is amazing! Anyway, many of us use an envelope system. A small according file would work. I take and figure out my monthly budget and leave in the bank what will come out automatically for insurance and utilities each month then the rest I pull out in cash. I do up my budget and plan on expenses for the month. I have one slot for gas, one for groceries, one for restaurants, ect just list what you spend money for each month that you pay with cash for. Label your slots or envelopes and put the money in each slot. When I spend the money I put that receipt right back into the same slot the money came out of so I know where the money went to. This system has worked well for us for a couple of years now. We were use to using our debit card for everything and then moved out here in the boondocks and no one takes credit/debit cards they want cash or checks. Lots of very small businesses and lots of Amish stores. I write on my non labeled receipts what it was for (Amish) Groceries, gift, Lifestock, ect. so I have some clue later on. If I keep my receipts and have the date and what it was for I get all my sales taxes back from the state for farm expenses so I save all my receipts during the year for tax season. This has worked well for me, it was a mess before I went to this system!

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Budget101 Discussion List Archives General Budget & Finance Cash or Credit? Which is easier for you to budget?