Cash Only, Week 2: Belt-Tightening
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photo: practicalowl
On April 1, BargainBabe.com blogger Julia Scott gave up her credit cards for one month. The goal of her experiment: find out whether using cash only will get her to spend less. After a surprisingly spend-happy first week (she exceeded her weekly budget by more than 60%!), Julia braced for a belt-tightening Week Two. Here’s what happened.
My plan to stop the exodus of cash from my wallet during my month-long credit card moratorium was working really well. I simply left the house with very little cash and presto! I spent very little.
Then three sleepless nights came and went and I decided I had to buy a new mattress. At IKEA the bill came to $533 for my new mattress and a set of measuring spoons. (I couldn’t resist!) That brought my total April spending to $1,043. My target spending for the month was $1,200 or less.
Um, yeah.
Now I’m faced with a tough decision. Do I dip into my savings to cover the $533 mattress or eat Top Ramen the rest of the month? (What do you think, readers? Let me know in the comments.)
Either way, I’m learning a lot about cash-only budgeting.
* I should have set a weekly spend goal based on my monthly budget to stay on track. Doling out all the cash at the beginning of the month and then trying to stretch it 30 days requires superhuman self-control. I’m only mortal!
* It’s okay to run out of money at the store. Just smile at the cashier and say “Oops! I’m short. I’ll just buy the Doritos for now.”
* By some stroke of genius, leaving the house with only $20 means I will spend less than $20. Who knew?!
* When you hand over $500 in twenty dollar bills the cashier and everyone in line will suspect you are a mobster. Deal.
* Don’t expect to know where most of your money went at the end of the month. No one offers receipts these days. However, Mint.com just introduced a feature that helps you track cash purchases that should help in the weeks ahead.
Wish me luck getting through the next 16 days on $157. I need it!
Julia Scott blogs about saving money on everyday expenses like groceries, gasoline, and gifts at BargainBabe.com.
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9 Comments so far
leave a commentI’m confused- did you know you were going to need a new mattress?
Mattresses are not ‘day-to-day’ purchases- they’re something you probably by at most every 5 years? In that case, it’s something that you generally can plan for, discounting mattress emergencies. I would say either emergency, or one time necessities are definitely acceptable reasons to dip into savings.
In either case, I like this series- I myself have been using the new cash tracking feature a lot; and though it doesn’t do everything I would like, it’s definitely expanding the usability of Mint for me. It’s great that it is allowing me to budget well without necessarily increasing my reliance on credit cards.
Doh – I saw UK Sterling in that chap’s pocket and thought Mint was now available for UK institutions…guess we’ll be waiting a bit longer!
I left some comments in your last post but the same things ring true. Since you already spent your budget on a bed (which should have been saved up for) you’re going to have to decide. I say eat ramen. These sorts of expenses are why I try to keep a couple weeks of food around the house, so when I blow the budget on car repairs, I can eat food out of the house while I work on getting that money back
Eat the ramen. Otherwise the month was a failure and all your hard work seems wasted, at least on the surface.
On the mattress. If you saw this coming and had been saving up for it, you should had used the savings to pay for it. but at this point, what’s done is done. I’d stick with your plan and only use the $157. You’ll be surprised how far it will go if you tell yourself it’s truly all you have left this month.
Go for the Ramen, or return the matress, budget for it next month an buy it. Either way, DO NOT dip into your savings account.
Return the mattress. IKEA mattresses are much lower quality than other places. They stuff their furniture full of paper and cardboard. Costco is having firesales on memory-foam and Sealy posturepedic mattresses. Go buy one there and save a hundred bucks, and sleep much much better. While you’re at Costco, make sure to buy the bulk pack of Ramen to cover you for the rest of the month (and perhaps the next three months!)
Buying in bulk is actually one of the biggest mistakes a lot of people can make. I’m not sure of your exact situation, but I am about to graduate with student loan payments and living by myself. In my situation, the money that I would save buying in bulk (which translates to ~5% savings) could be paid to my student loans (2.5 – 10%) for a net economic gain. Additionally, because it’s just me, bulk purchases experience a lot more waste: spoilage, loss, damage, etc. Just something to think about!
Obviously for a family of five to buy larger amounts is still a good idea, but that’s not really buying in bulk, it’s buying in the quantity you need!
After 3 boring trips to work I went to the local Maserati dealer and bought a new car….seriously?
I agree with Joe S. An IKEA mattress has to be horrible and I am sure that all the sheets you purchase for said mattress in the future will need to be bought at IKEA since everything is based on the metric system. Go to Costco, get a good mattress & the ramen. Return the mattress to IKEA and purchase a memory foam pad for your old bed. Much cheaper and they really feel like heaven!