Try using cash

littlejen_3 · 18 May 2006 at 8:14AM

Hello Everyone,

I used your website a few months ago and since then I have really sorted myself out. I got rid of my car through the hire purchase loophole, saving myself £230 a month just on the finance! I have also used all the tips from this website to change APR's, phone bills etc. I set myself a budget every month and for things that can be paid in cash I do so. I have a box in a cupboard in the house with a set of envelopes in it each with the ammount of cash needed for each thing. ie food for the month £150, toiletries £20, window cleaner £8. Each month I find I have change in each envelope then all I need to do is top it up to the right level. This leaves me more money in the bank at the end of the month to pay of debt on top of my normal payments. I also have a change pot, because I am using cash I find my purse is always bulging with coins. I take out everything except for 50p and £1 coins and these go into the pot. At the end of the month I take this to my local supermarket where they have a machine that will either give me cash back (notes) or supermarket vouchers. If you had asked me three months ago I would have said that this was impossible (partly because I was so stuborn) and that every penny counted and I was constantly counting the pennies but believe it or not I don't miss them! Using cash really makes you think do I really need it, you see how much you have and want to save as you know it's all you have until the end of the month. Odviously there is the danger of using your card when you go out and see that must have top so leave it at home.

I hope this helps some of you, I was a complete sceptic about this website but amazingly I have been compleetly converted. It is mainly in thanks to my amazing boyfriend who without his support, guidance and encouragement I could not have got through this.

Debt at worst £28,200 plus car at £8000
Debt now £26,641

I used the snowball calculator to calculate my debt and printed it out, every month I highlight a line when the payment has been made. It is really good for morale and you can see where you are with things. I know when my debt should be gone but I want it to be gone before that so I can see what I have to work towards.

Broken_hearted · 18 May 2006 at 8:23AM

Glad we've been useful to you. Well done on reducing your debt.

Zabl · 18 May 2006 at 9:41AM

A big well done to you Littlejen

I've started taking £10 cash out and that has to last me for the week, eg: lunches, ebay posting etc..... it really does make you think about those purchases I agree.

Keep going and reducing your debt :j

climbgirl · 18 May 2006 at 9:46AM

The only thing about using cash like that is that you lose interest on the money. I have a similar system only instead of envelopes in a box I use different bank accounts as my pots, so I'm gaining interest on the money as well.

The change machines in the supermarket take a cut of your change too, if you bag it up and take it to the bank you get to keep it all!

taplady · 18 May 2006 at 10:25AM

I do the envelope system too and its great to know that you have enough to last the month for essential things! I havent tried saving my change yet as most of the time I use it to save breaking into a note!;) well done on your success!:D

GreyPilgrim · 18 May 2006 at 10:40AM

I stopped using debit and credit card for a period after seeing that financial guru on tv (Alvin...Hall? something like that). Just speaking personally, I found that buying things on plastic didn't have the same emotional impact as paying for stuff by cash...you don't really appreciate how much you're spending when it's on the card. If you have to actually hand over real notes and coins it DOES make you think twice about spending.

However I'm with the Card brigade now. Salary goes in bank, direct debits come out, but I live off a credit card for the whole of the month. When next months salary goes in, I then pay off the credit card in full so I don't incur any interest and start again.

So I'm always sort of a month behind in a way but i'm getting as much benefit from having my salary sitting in the bank untouched for a month as possible (granted at the moment it's not a lot as I'm still paying off the last debt at the start of the month too!)

nicola1982_2 · 18 May 2006 at 10:49AM

Great stuff - when I finally get an income I think I'm going to do that myself!

Joe_Bloggs · 18 May 2006 at 11:14AM

I use an egg money credit card with 1% rebate for major purchases (£10+) in supermarkets but for local purchases use cash. I pay my bill via a debit card even before the bill is sent via email. The result is the bill is always for £0.00 as I monitor the exact balance online. I get 4.25% on my current account balance.

Many small retailers would charge for small credit/debit purchases so cards are to be avoided. The knack of cash purchases is to give more than the nearest amount so that you receive the most useful change in return. If I bought something for 93p then I give £1 and 3p and get a silver 10p back. this does require carrying a small range of coins so that the numbers of coins do not mount up at the end of the day.

The coin machines in my local suprtmarkets charge 7p in the pound to count change and issue a voucher that can be exchanged for cash at the service desk or spent at a till. It is perhaps best to dip into your stash of coins everyday in order to get rid of them at face value and to avoid collecting even more of them. This is why I am against collecting small change and automatically hiding it away in a piggy bank. Keep a working change float and you will not accumulate change.

J_B.

rlm_3 · 18 May 2006 at 11:17AM

littlejen wrote:

I used the snowball calculator to calculate my debt and printed it out, every month I highlight a line when the payment has been made.

It never occured to me to actually print out the snowball calculation. Doh!:doh: Thanks for the idea

littlejen_3 · 18 May 2006 at 11:32AM

This is all great I am glad so many people have replied and are doing similar things. I will now take my change to the bank instead. I had thought about paying for things on a credit card and paying it off each month in order to get the added interest but I don't trust myself yet as i'm a bit of a shopaholic! If I am still doing as well at the 6 month point I will reconsider. I know it is the best thing to do.
Thanks

FrankieM · 18 May 2006 at 12:09PM

I personally find that if I have cash it runs through my fingers like water..but if I use a credit card then I generally have no idea how much I've spent till the statement comes in, so it can be a bit of a shock!
I've found that using my switch card is the best because I check online banking everyday and so I can keep a good check on things.
Having said that I can now check my cc statement online so maybe that will be better.

Try using cash

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