Why We Use Cash

We have never been credit card people.  I did have a credit card near the end of high school and into college, but I paid it off every month using money in my checking account.  When we got married, my husband was passionately against the use of credit cards, so we decided we would be debit card people - the money would come straight out of our accounts so that we never spent more than we had.  However, after a few years, we realized that, while debit cards were perhaps more responsible than credit cards, we were still spending more than we ought to, and certainly more than we meant to.  As a result, we decided to be cash people.  Here's how we do it:

• BILLS - bills are paid monthly through electronic funds transfers from our accounts, so no cash is used here
• GROCERY - I budget $50/week for grocery, diapers, hygine items, and any other consumables needed for us or our home
• FUN MONEY - we each get $50/month for entertainment, wardrobe purchases, or any other "fun" thing on which we may wish to spend money (this was a VERY difficult adjustment in the beginning - probably the hardest part of the whole system)
• OUT-TO-EAT MONEY - I hate that we have a section for this, but it really can't be avoided. Since my husband goes to school 30 minutes away, he has to eat out each day, and most of the time, he has to do it on campus, which is expensive.  He can't bring his meal because he has nowhere to store it, and even if he did, his schedule is such that he wouldn't have time to go trudge across campus, retrieve it and warm it up. We will get a reprieve from spending this kind of money this summer!
• GAS - this is the only thing for which we use debit cards - since it can't always be predicted, it is difficult to budget cash (and even if it wasn't, it's a pain to pay with cash at gas stations!)

We have successfully (for the most part) employed this system for nearly eighteen months.  I have no idea how much money it has saved us, but the savings has been significant.  When you run out of cash, you can't spend it!