Nothin' Fancy Friday: The Five Dollar Savings Plan

Since moving to Indiana, we have cut our household income by almost half, and added a baby to the mix. As you can imagine, we have had to make some changes to how we handle our finances. One thing we've done that is working really well is we are using CASH for our groceries and entertainment. Groceries also include diapers, toiletries, cleaning supplies, etc. Entertainment would be going out to eat, taking the kids to the museum, going out for drinks, etc. We have a set amount that we use each month - each month it's the same. Once the cash is gone, we need to get creative while we wait for the next paycheck to roll in.

Something I picked up on Pinterest (and I'm not sure who to give credit to) is the Five Dollar Savings Plan. It's simple. Find a jar - or any container - and each time you receive a $5 bill back as change, you put it in the jar. Of course, this only works if you use cash... this probably isn't the best savings plan for all you credit/debit card swipers. I have to say, though, it's hard letting go of those $5 bills! haha But, we did manage to rack up $55 in just two weeks!

As motivation, I put a list of reasons to save on the other side of the jar so we aren't quick to spend this cash on frivolous things.

This would be something fun to do with your kids, too.

Replace the $5 with coins or $1 bills.

I like the transparency of it so I can literally see our money pile up. :)

Happy Saving leads to Happy Spending! :)

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Another budget tip - use cash for everything! (not the plan for us, but might work for you!)

You can download cash envelope templates from Today's Nest at http://www.todaysnest.typepad.com/todays-nest/2010/09/todays-money-budgeting-with-cash-envelopes.html if you want to try this type of budgeting system.