Over the years I have researched the various budgeting strategies and focused on what I thought was the best method. The truth is, budgeting is highly personal; what works for some, won’t work for others. Despite the method, most budgets are broken within only a couple of months. Ironically, it’s the small purchases that are mostly responsible, because these items often go unnoticed and remain unaccounted for.

Over the past three months, I have been following a different type of money management system, designed to ensure I don’t overspend on the little things like my morning cap, lunches, and drinks after work. I call it the Petty Cash method, and it’s based on the ‘pay yourself first’ philosophy.

It may sound a touch archaic for 2019, however on payday, as soon as your money hits your bank account go to the ATM and withdraw a set amount in cash which is your ‘petty cash’. This is your walking around money, which pays for the little things. The catch is that you must make this money last until next payday. If you run out, bad luck, no tap-and-go, no using the credit card, no getting more cash out at the ATM, you just have to go without, until next payday.

Obviously, you will need leave enough in your account to pay for your regular known expenses like mortgage, car payments and utilities, however, the idea is that the small purchases disappear from your credit card or savings account statements. This should in turn leave more money for you to save or pay down debts.

Now the petty cash method may not be for everyone, but all I can is that I’m three months in and it’s working! I’d love to hear your thoughts on how this works for you.

Michael