However I think it is important to have some cash that you can get to immediately. Where we live we quite often have power failures and when that happens there is no way to get money. The banks shut their doors, the ATMs don’t work and credit cards and debit cards don’t work. Most of the stores close down as well but some stay open and they accept only cash. Ditto for those gas stations that have generators for their pumps. In the case of a long term emergency the only thing you can count on is cash.

We have cash stashed at home. Don’t tell the burglars. It is so well hidden that I cannot remember where it is so had to make a treasure map and mail it to my sister. In the case of an emergency I will tear the house apart playing hide and seek but if that doesn’t work at least I can get her to tell me where to look. That is if she can find the map.

We just kept accumulating left overs to the point that eventually we had double the budgeted amount in each category – which was terrific because that meant that we had duplicate jars. With the duplicate jars we were able to stop living pay to pay because the money for this month was already sitting there so what we earned in this month was for next month. Made budgeting a snap.

We eventually funneled all extra money (tax refund, overtime, garage sales) into our budget so that we had the entire amount needed for our monthly expenses sitting in the bank at the first of the month and what we earned in that month was then easily budgeted for the next month. What a stress reliever – never have to worry about an NSF cheque again or getting to the bank with my pay cheque on time.

This also made it a lot easier to find even more money to put down on our debts.

We are debt free now (except for the car and mortgage) and will never live any other way but the Gail way again. No kidding. People tell me that I look younger and I know it is because I am not stressed to the breaking (wrinkling!) point anymore.

I was going to buy used again, but where I travel so much now for work, it made better sense to buy a vehicle that had a warranty. I had gone to other dealerships and was really interested in another vehicle, but they company refused to honor the rest of the warranty, or give me any money for my beater.

I’m glad I started reading this blog and am every so slowly making changes!

Side note: I was robbed once and they took our piggy banks (among other things), so cash in the house is always stressful for me.

On cash vs. credit/debit cards:

I found that the smaller the pile the harder I find it to part with any of it, so I budget for a year, but give myself only a weekly cash allowance for day-to-day expenses. If I pay for any of that with credit/debit card (e.g. buying online, or needing gas on Friday) it counts against next week’s allowance.

I also keep enough cash in the house to ride out some trouble: lost purse, bad flu, catsitter has to take the cat to the vet while I’m away… . The box it taped shut so the cash doesn’t sneak out.

I can’t use credit cards because I lose track of what I’ve spent, so cash is better for me.

Do what makes you feel stress free (money isn’t everything but peace of mind is).

Cheers.

On the cash vs. CC with point thing, I definitely do the CC thing, but as others above have noted the critical part of any system we use is the tracking of the details. I have an Excel spread sheet with every planned expense laid out week by week. I pay off the credit card every WEEK and the items which show on the spreadsheet are just updated with the real amount instead of the budgetted amount and paid on the card. The indvidual items still show on the sheet just the method of payment changes. By balancing up every week I find it much easier to keep on top of things and I absolutely never pay an interest payment. It bugs me to ever pay cash – I always see it as missed miles. We used to budget $80/week in pocket money – to spend as we liked. Mine was mostly left at Tim Hortons… Since I began working from home I don’t have the opportunity to spend money most week days and that $80 only gets withdrawn every 3-4 weeks now. We used to take out $160 a week; my DH was laid off 3 yrs ago and we cut that to $100 a week and never missed the extra. This year I cut it to $80 and because of the work-at-home situation we’re not even using that. I checked the cash (untracked misc) from Jan-July of this year and it’s under $1200 total for the two of us for 7 months. Since watching the show I did start paying closer attention to where that miscellaneous cash was going. We got ourselves those Tim cards which we load online with our VISA so now I know exactly how much I’m spending on misc. coffee, plus I get the points (they won’t take the card in the store, so this is my workaround). With coffee now visible and not an untracked pocket change item we really have nothing else we spend cash on. If I continue to work from home I may cut the weekly pocket cash budget to $20 for 2010!

On the home purchase front, I agree with the comments of others. The offer of the $50k is very generous, but you are ultimately the one left paying the bills. There’s nothing wrong with an older home, in fact there is plenty that’s better. They are often in established neighbourhoods with mature trees and wider lots. Often the older places often have been upgraded with the things you admire in the new places. If not, then you can chose to do only the upgrades that really matter to you. I regularly see adds for places with “fabulous gourmet kitchen” only to look and realize they picked the exact opposite of what I like. So for me it’s not an advantage or something I want to pay extra for. Somepeople find it hard to look past awful decorating or clutter in an older home, and are wowed by the model home. If you have no imagination on what a place could be, take along a friend with a creative eye. We bought our first home (townhouse) in 1984. It had been the model home for the neighbourhood in the early 70’s. Nothing had been changed. Remember 70’s decorating? Ick. We spend weeks scraping off orange, gold, and avocado green wallpaper from every room. To add to that the previous owner was a heavy smoker and every ceiling was yellow. If we’d been the least bit unimaginative we’d have run screaming out the door, but we focused on what it could be and were very happy there.

In the end do what works for you and your family, and that may be to continue with exactly what you’re already doing.

Don’t let other people decide what’s best for you and your family. Trust your self and don’t let anybody bully or bribe you into doing somthing that causes you stress. You have the power to make it stop.

Good Luck!

The way that I keep track and on budget is to simply use a sheet of paper each month. At the top of the page I write the jar headings and the amount budgeted for each category – groceries, gas, pet food etc.

When we buy gas on the credit card we enter the amount of the purchase under the Gas heading and subtract it from the budgeted amount. This way we always know how much gas money we have left to spend. Ditto for the other jar categories. When we get the credit card statement I just check off the charges and pay the total.

To start a new month I add whatever money was left over from the previous month to the new budget amount. For example: August gas money left $11.25 plus Sept $100.00 equals $111.25 for September.

The only one we have ever had to watch carefully is the groceries. You have to know how much you have left BEFORE you shop and you have to add things up as you throw them into your cart. It is also important to keep a little grocery cash for those time you have to just run in and buy a loaf of bread or 35 cents worth of bay leaves.