I've got a wife that hates the notion of a budget and I know better than to argue with the woman. But one thing we've always agreed on was controlling spending and dodging credit card bills. And, if we say so ourselves, we've done a hell of a job.
You don't need a budget - you just need to be consistent. And all we did was developed a simple technique that saves us the trouble of having to follow the inflexible regiment of a budget. Our technique is to follow a few simple rules - all the time.
The first rule is to stop using your credit card. The only exceptions we make are for gas and online purchases. Just limit yourself to a fixed amount of cash to to take out of your ATM every week. Be reasonable. You can make this number a bit more than what you currently take out.
Whatever you decide about the exact amount, withdraw the money out on a specific day of the week - our designated day was Sunday afternoon. We'd split the money right down the middle. Then we paid cash for everything we bought during the week. If we had money left over at the end of the week (typically $20-$50), we would shove it in the kid's piggy bank.
This method ended up being very effective. There's something about parting with cash. You know you'll never see it again and you always pause to give it a proper send off. Most people who use or abuse credit cards have a single inhibition - crossing their maximum limit.
Paying by cash is like having hand breaks to control impulsive spending. For one thing, there is no mistaking that the wallet is getting a little bit lighter. That's why Sunday is the perfect day to pick up your weekly allowance - it cuts down on the tendency to splurge on the weekends.
I don't care how well off you are, when you have $50 in your wallet and three days to go till your next ATM visit, the only thing you're hoping for is a cheap date with the missus. If she's good enough to go dutch, you know you've married the right woman.
If you consistently apply this simple technique, you'll constantly have your cheap radar on. We were able to sock away tens of thousands of dollars for a down payment on a house and we never felt we were depriving ourselves of anything.
Try this simple technique for a couple of months and see how it works for you.
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