Friday, December 1, 2006

wanna save money?

Many participants in the Dave Ramsey course (Financial Peace University) have spoken how using cash in an envelope system actually saves money. (An envelope system is where you put the planned or budgeted amount in an envelope and use only use the cash there for a purpose.) Most start out using a cash envelope for food purchases. For some reason folks are not quick to spend using cash rather than plastic. We’ve had testimonies about envelopes for clothes, going on vacation, etc. Even a college student found he was saving as a result of the envelope system.

This confirms studies that show that people tend to spend on average 18% more when using credit cards. They not only buy more but pay more for what they buy

Since this is the first of December and Christmas comes in December this year, try something new. (Christmas in December may be a surprise for many people. At least a lot of folks act as if it is by not planning to have money rather than credit available for purchases.) This year plan how much to spend for Christmas. Put the cash in an envelope and use it for all Christmas shopping. If more than one person does the shopping, use separate envelopes for each person, then divide the cash between them.

What if you do not have the enough cash? Then you probably ought to rethink what Christmas is about. It is not about becoming a slave to the lender (Proverbs 22:7). Jesus came to free us from bondage. Is it really appropriate to celebrate his birth by going into financial bondage? Yeah, I know you want to have a ‘good” Christmas. If a good Christmas is about Santa Claus, buying stuff, the materialism thing, then finances may not be your most serious problem.


Darlene said...

I love the envelope system. Since I do alot of online shopping I do need to use plastic. But I never use it unless the cash is in the envelope to transfer. Now, sometimes I borrow from "auto" to pay for a birthday. I'm still tweaking the amounts to figure out just exactly what is needed where. But overall, it has been tremendous for me.

RB said...

You're smarter than we are. It took us a long time to realize that if and when we use plastic to then transfer the cash from the envelope to the credit card envelope.