I am spending cash like a maniac and have little idea where it is going. Five days into my month-long cash-only experiment, more than $200 has slipped out of my hands.
That’s partly because I feel more generous with a fat wad of bills in my pocket. I’ve fronted a bar cover for friends, paid for breakfast at a coffee shop, and treated myself to a package of beef jerky at a roadside stand. Tasty – but pricey! There was a tank of gas and…I can’t remember the rest.
I’m used to having a neat record of all my purchases at the end of the month on my credit card bill. With cash I forget to ask for a receipt and often the cashier forgets to give me one. How much money at the end of the month will be unaccounted for? I’m guessing almost half.
As I said in an earlier post on preparing to go without plastic, I hid my credit and debit cards in my jewelry box. Later that day I opened a letter from my Alma mater asking for money. I thought, “I can charge this donation and get cash back!” (My credit card has a 1-3% cash back deal). When I pulled out my wallet to retrieve the 16 digits to write on the form, I remembered my credit card moratorium. Oops! I will have to wait until May to send my school a contribution.
The next day I pulled my debit card out of its hiding place. I was going on a solo road trip and decided to carry it as a backup, just in case. If for some reason my car broke down, I would most likely need more than $300 – my cash allotment for the weekend – for the fix. Not that I plan to spend $300 in one weekend. I’m carrying around extra cash because I’m worried about not having enough money, which leads me to spend more because I have so much money. How ironic!
I’m not quitting, however. Support from readers has helped, including this email from Ellen, who saw my column in the N.J. Star-Ledger:
I read your column on going plastic-free (a.k.a. sans credit cards) and wanted to throw you some words of encouragement from someone who’s been there, cashed that. About ten years ago I successfully completed a credit card counseling program, one which required me to surrender all my plastic for the duration it took me to pay down my debt.
It was a small price to pay for getting my payments consolidated, interest rates lowered and getting those pesky collection calls to stop clogging my voicemail. So for three years, I went plastic-free all while I got my debt in order. Every transaction that required a credit card–like buying an airline ticket online–I simply used my debit card which contained a Visa logo. This win-win allowed me to make online purchases and have the money directly withdrawn from my checking account.
When I finally received the letter declaring me debt-free I eased back into just one credit card which I pay in full or darned-well near try. Since I’m still on a strict budget, I still try and use my debit card only. Good luck on your cash-only venture.
I’m rootin’ for ya.
Welcome to Bargain Babe! I’m Mara, and I’m so glad you’re here. I am an obsessive bargain hunter and penny pincher, and I am determined to live a full life without EVER paying full price. 
Try carrying your emergency money in large bills (like 100s). That will give you a little more of a psychological barrier to using it
Oh, and don’t take all your money with you all the time… just a little more than you expect to need
Either you are a spender or a saver…..with or without credit cards.
i’m really interested in the results! I am the total opposite ever since I started working. I never have cash on me. I agree though, I do like seeing my spendings layed out monthly. Good luck!
Cash spending is the way to go. Suze Orman recommends everyone stop using their credit cards and pay fo rstuff in cash. I am a bartender and get cash every night that piles up in my drawer. I always buy with cash except big ticket items( TV, furniture, airline tix). It’s easy to track your spending if you do it everyday. Sometimes it’s hard to remember that you spent $1 on parking or $0.50 on a candy bar, but if you continue to write it down everyday, it becomes habit. Keep going.
I withdraw a set amount of cash each month to cover daily expenses. One main exception is sometimes writing a check at the market, and paying bills, such as the utilities, by check. When I do go out, I decide ahead of time approximately how much money I will need, and round up to the nearest ten dollars. I always keep a CC in my driver’s license wallet for emergencies, and rarely run short of cash, or need to carry more. I’ve found I’ve gotten better with practice. This plan has also made me think twice about unnecessary purchases, such as junk food!
Since I use my debit card and not solely cash (but NO cc’s), I don’t really do this on a monthly basis, but when I was really strapped for cash a couple years ago, in the midst of being in a friend’s wedding on the east coast, I did what I had to do. Break down your cash into days or weeks…you can split it evenly for a “weekly” budget (so you know if the cash is gone for that week, you only have to wait until Sunday for your next “allowance”, and not until the end of the month!), or if you are doing it, say, for a long weekend trip, I broke each day’s budget up. So, the first day was brunch with a friend (allowed $30), dinner for the bachelorette party (allowed $30), and some extra cash (allowed $50 or 60) for drinks, taxis, etc (the hotel & night’s activity (including most drinks) were pre-paid). I put each day’s into it’s own separate envelope, and knew the ballpark that I wanted to spend on each budget bullet point. Yes, I looked a little crazy to my friends, pulling out my labeled envelopes, but it worked SO well, and I was proud of myself for sticking to my budget & wasn’t once tempted to use my cc!
During this time I was also keeping track of spending & daily budgets (at the beginning I broke it up into days…but whatever works for you!)…I would put the budget for each day into my Outlook calendar (which syncs to my phone), and then keep track every day of my spending (this was for cash OR debit card transactions). Anything leftover went into the “leftover tally” for something special at the end of the month or any unexpected things. Using my calendar made it really easy to always have my running budget tab on me, wherever I was!
PS–I just realized that my budget sounds rather high ($120/day example), but let me just say that this was only for the trip (to NYC)–otherwise, daily budgets would range from $15-22/ day at home (calculated after rent, bills, etc. were paid), but I was always still trying to spend as little as possible during that time, so most days I would still come in under budget!
Hey babe,
Your doing it wrong. Don’t carry a ton of cash. It will just burn a hole in your pocket. Take your daily allowance with you and hide the rest at home. You’ll find yourself saying no to a lot of things in order to stretch that daily ‘allowance.’ Especially if your extra cash at the end of the month will go to something great. good luck!
Oh and as for not having a nice monthly statement. Do what my wife does and keep a check register for all the cash your spending. It only takes a few seconds to write down what you spent, where you spent it and on what. Plus you can get as detailed as you want and not be stuck with the info your CC statement chooses to offer.
We use an app for our droid (cell phones) called Easy Envelope Budgeting Aid. Everytime I make a purchase, I immediately get out my phone and enter it in. The system works by allowing you to create categories (envelopes) and set the amount of money you want to spend from that category that month. Its easy and works great. And, the hubs can see on his phone if I spent money somewhere, and I can see if he can. We are both responsible for recording our own transactions. We love it! If I’m remembering correctly you have an iphone…why not look for an app that will allow you to record your transactions? Much easier than trying to remember a reciept, etc. especially if you can get in the habit of getting out your phone while you are waiting in line or paying your tab.
I agree with Maggie. Just carry enough for that day. I think your experience highlights is the issue many people have. We spend it if we have it. Until there is a internal shift in perspective it is a battle that will continue.
Good luck
I think you’re exercise is great, and I’m definitely following closely to see how it goes. However, I don’t agree with people in the Suze Orman camp who think that everyone should do away with their credit cards.
If you are responsible enough with your finances to stay within your budget, diligently pay off your cards every month, and save a little on the side, there’s no reason you shouldn’t have a credit card.
Since so many credit cards pay you 1% or more on your purchases, you are leaving money on the table if you don’t have one. And since they charge merchants such high fees, a lot of them have been forced to raise prices accordingly, and those credit card rewards are your only way of recouping that money.
Have you thought about getting a prepaid debit card?
Not to toot Walmart’s horn but I have one of their pre-paid debit cards and it works out really well for me. Bi-weekly I load my spending money onto the card for a cost of $3 which is well worth not going further into debt. I can access my card info online which allows me to track spending. The best part is the transaction history feature because it breaks your purchases down into categories such as gas/fuel, fast food, pharmacy, etc.
The only thing I’ve found so far that I am unable to use the card for is to rent a car but since that’s not something I do often it’s not a concern for me.
I feel more comfortable carrying this card in place of cash and I’m also able to use it for online purchases. It prevents me from charging merchandise or sucking my checking account dry. When the money is gone the money is gone.
Congrats on going without your plastic!
Just a note about cash. The great thing about only using cash is that you figure out how much you can spend in the week. Once it is gone… it’s gone. Better have some peanut butter and jelly stashed away if you run out of cash.
It’s amazing what you WON’T buy when you know you may not have gas money.
Looking forward to reading more about your adventures.
Have you thought about opening another bank account that only allows you to do debit transactions. Just transfer the amount of money you believe you will need for the week into that account and only use that debit card. This will help you track your spending and not pay a fee for a pre-paid card.
Hey Bargain Babe,
I can understand using cash as opposed to credit cards, but why not just use your debit card? That way, you pay for all of your expenses with the debit card, it comes out of your checking account, and you still have a nice, neat accounting of it all at the end of the month. I don’t like the idea of you carrying around a big wad of cash. What if you get pickpocketed? Leave the big wad of cash in the bank, babe! 🙂
No matter the method, it still comes down to discipline…I don’t think there is any magic to setting an amount of cash and saying ‘when it’s gone it’s gone’. No, it isn’t, there are ATMs everywhere and if I’ve spent all my budgeted money and am hungry, I will go to one (provided I have money in the bank), or use my credit card. You either restrain yourself or you don’t, there is no foolproof method.