The comments are great too.

Well, it is if you don’t know much about array formulas. For someone who is fluent in Excel, a few simple array formulas will slice and dice that any way you want.

February 2008, I began following a program to reduce our debt. I paid off a little over $7,000 before one June evening, after being questioned about how much money we had in our various accounts, he started pressuring me, and I caved. I had to face him and explain how we had $45,000 in credit card debt, and unsecured loans, not including the house and car payment.

It was very difficult to share the truth with him, however the best thing I could have done. I will spare you the horrid details, but thankfully, our marriage survived, and is now thriving.

Finances are no longer the weight on my shoulders alone. WE carry the burden, and are working on on paying the debt together. WE sit down every other night and go over our finances, make sure our register balances and that WE are on the same page. WE have a budget, WE have categories for which we put money aside each pay period, WE have spending money, are saving money, paying debt, and have money in the bank. Together, WE are doing it. I cannot describe how much better I feel that I no longer carry the entire burden.

I’m no longer deceiving myself, or my husband, nor robbing Peter to pay Paul. I’m thankful my husband is forgiving and understanding. It wasn’t easy for him to forgive me and I have broken trust that will take some time to rebuild.

I worked hard to hide everything from him. It wasn’t easy, and I was tortured daily by hiding the truth from him. He did ask me questions. My personal favorite response, “Yes, the bills are paid.” I always responded “that everything was fine”, “or don’t worry about it, I’ve got it taken care of.”

I’m thrilled that the truth is out, and there are no more stories in my head.

Some people seem to think that the “cash only” system means “spend cash only, then get more cash when you run out!”

No, there’s a system to it–which involves a form of budgeting where you decide ahead of time how much you can spend in, say, a week.

As to “cash being harder to track than my debit card”, again, it’s a matter of habit and technique. One think I do with cash is I have a rule that if I spend cash, I have to make out a “receipt” on a piece of paper, which I file in my wallet. If I don’t have paper and pencil in hadn, I make it my first job to do at the next place I can get paper and pencil. It usually says something like “7/27/08 $2.10 cash parking”
This receipt goes in a jar by my computer where I Put all of my receipts to be tracked until I sit down to enter them into Excel.

I think most people could benefit from running at least a month when they use a cash-only budgeting system. It’s how my grandparents and great-grandparents managed their personal (not business) money, and it’s really the basic fundamental skill that provides the basis for managing, say, a checkbook, a debit card, or a credit card.

I do have to amend Success Professor’s comment that “If that doesn’t work, at the least switch to a debit card,” because I think if you can’t learn to manage a cash budget and discipline yourself to “go without”, even as an experiment for a month to learn what it will teach you about yourself, you haven’t developed the will or mindset to control your money. And whether you use cash, debit, or credit at that point is irrelevent–you will still likely be out of control of your spending.

(Interesting note: when some of my elder relatives passed away about 5 years ago, we found notebooks in their house that listed every bit of income and EVERY expense that they made, with a note for what each was–they had notebooks going back 50 years!! For them, this was “how it was done”, no questions asked. Unfortunately for me that bit of wisdom didn’t get passed on to me and I had to learn it the hard, expensive way in my mid-30s!)

Try having a cash budget for only a week. Then be disciplined that when you run out, you don’t spend anything else – even if it hurts. No groceries, no eating out, no coffee.. nothing. The pain will help you discipline yourself.

If that doesn’t work, at the least switch to a debit card.

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A year ago, we were in a financial mess. Sure; we made the credit card repayments etc., but the truth behind the numbers was horrible – and neither of us really wanted to face up to it. My wife half mentioned things from time to time, and I remember looking at credit card bills and thinking that this was going to get ugly. I had no idea what to do about it, though.

One day, I came home from work, and my wife had laid out a spreadsheet of our debt and a budget. It had taken her the best part of the day to create, and it showed that right now, we were living beyond our means. Her part-time job would keep us afloat until the end of the year, but after that, it was a reasonably swift slide into financial oblivion.

She fixed me with a look that only a wife can, and said “fix it”. Nothing more was said.

What I should have done is sat down with her a day or so later and worked out a solution, but what I did do was typical Aussie male: I said nothing. Behind the scenes, I was working at fixing things. Timing was important; I knew a pay rise was coming down the tubes, so I researched personal loans to consolidate all the debt. A lot of her numbers were guesses, so we started keeping track of petrol purchases to get an idea of how much we spent on fuel.

Her budget was done in Excel. It was great to look at, but tracking transactions etc. is beyond a spreadsheet if you want to do decent analysis of spendings. So, I researched and decided on Microsoft Money. Best A$50 I ever spent. Her budget translated into Money quite well. Being able to keep track of transactions and see where our money was really going was amazing.

Finally, the pay rise came through, and I applied for debt consolidation loans; one from a bank and another with a finance company. The remainder of the debt was transferred to a zero interest credit card. This was three months after my wife had originally sat me down, and I hadn’t said much about money or debt since then. She was surprised and shocked (to a degree), because she figured that since I wasn’t talking about it I must have ignored her or forgotten about it.

Today, we’re a few months away from having a zero credit card balance. We can make this happen by the end of the year! I can’t believe it, to be honest. Sure, there are the loans to go… and we’re deciding now on what we’ll do once we’re free of credit cards: how much extra to pay off the loans, and how much to start investing with. Also, we’re saving! Sure, putting money away for bills is saving, but we’re putting money away for “rainy day” savings, too. I know that people argue that paying off debt is more important, but if the car’s automatic transmission goes kers-plat and we don’t have savings to cover it, we’ll have to put the repairs on a credit card. Not a particularly smart option.

One thing that has happened is our communications have improved heaps. Being honest with each other financially has spilled over into every other area of our lives, and the payoffs are great. The dicipline of sticking to a budget is helping in other areas, too.

In short, almost hitting the financial rocks has been the best thing to happen to us.

The only thing I couldn’t do was to share my financial disaster with another person. My partner never had a clue because I was afraid of the wrath. My friends always think I’m so “together” and I was too proud to admit otherwise. I like to think that progress is being made slowly, surely, and positively.

But you are SO right, HOLY CRAP is it hard to come out and admit how bad it has gotten. But once you do, it is a huge weight off of your chest and really gives you motivation to hit the ground running in overcoming you debt battles. If you never admit a problem or you are never truthful about it, you won’t ever truly address it.

But if you’re getting your cash from the ATM, it’s just as easy to pull it from your available credit line as from your checking account. :-) At least with a debit card I know exactly where the money is coming from. Unless you are paid in cash, or at least directly cash your paychecks, it’s tough for me to understand why people find letting go of cash so much more ‘heavy’ than using a debit card.

It’s true, the numbers never lie–sometimes we choose to ignore them.

That’s why i am mostly skeptical of people who see they would get “no value” from tracking their income and expenses. In that vast gulf of ignorance about one’s own financial affairs lies the cover for all kinds of self-delusion.

Deciding to stop lying to yourself if the number one most important financial decision.

Great post, Trent!

That was very much my M.O. Reality set in when my husband and I got married, and I started adding up everything on our various cards. We seriously buckled down and paid off thousands of dollars of debt.

We still use one credit card, though. We pay it off every month, and so far we have enough miles for two tickets to Europe. My husband’s old card had points that got us $200 worth of gift cards from Williams-Sonoma. I think if you know you can’t handle a credit card, though, cash-only is a better option. I monitor our credit card almost daily, and I make sure we’re under our monthly self-imposed limit so that we’re reaching our goals for savings.

I like the cash only method…mostly, the only thing better than the cash method is a check only method. My wife and I used the cash method for about 10 years and did fine it got us out of debt and we knew how much money we had. The only problem we had was that it was a lot harder to track ware things went. When you use a old style check book with carbon pages and balance it each time you spend money you know just how much you have and it is easy to track.

I have even seen a fold out check registrar that will let you “pull” money from one budget or another wile still keeping it all in the same account. That way if you run out of food money you have to take it from some ware else like fun money or rent money. You don’t need to reach for the Credit card, and you know you are giving up your fun money or you are spending your rent money to buy what ever you are looking at. It puts a whole new twist on the thought proses. “do you really NEED that movie ticket or do you need to pay rent more” Think about it.

Thanks for all you do to keep me thinking

Clint Lawton

http://www.a-debt-free-life.com

Your are not alone, I was talked to a retired teacher friend of mine and he put it rather simply, “If I have it, I spend it!”. I really didn’t know how to react to that because as a kid that was pretty much was the norm for money and me. My question is does a time horizon help you out? Knowing that you will have 100 dollars miscellaneous cash for 2 weeks?(example) Seems like the only alternative is credit.