Cash Only, Week 3: My Changing Relationship With Money
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photo: stuartpilbrow
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%!) and a belt-tightening Week 2, Julia recaps what happened during the third week of her experiment.
I have been paying for everything with cash for three weeks – just one week to go before I can start swiping my plastic again – and my spending habits have changed drastically. I have gotten over my paranoia of running out of cash, though I am still obsessively adding up my purchases before I approach the register. I am also:
* Annoyed by how messy cash is. The bills make my wallet hard to zip up and the change bangs around noisily. It takes more time to count out a lot of bills and coins, especially when paying for large purchases.
* Less likely to leave the house with money. It’s the best way to guarantee I don’t spend anything!
* Aware that paying with cash alternatively makes me feel like I am in the mob or I am poor. Depends on how big the purchase is. Bigger than $50? Mob. Less than $50? Poor. Something about counting out one dollar bills and pennies until I have exact change to hand over makes me feel just how finite my supply of cash is.
* Probably going to use more cash from now on, instead of putting everything on my card to gain credit card rewards. It is too early to tell the effect, if any, this credit-less experiment has had on me, but I’m getting the sense that if I used cash for all my small purchases, I would spend less. Before this experiment, I spent very little in cash.
* Eager to get my credit card and debit card back in my wallet. I like the security blanket they provide me.
* Still clueless about where the majority of my money is going. No one gives receipts!
And for all of you wondering how I did on my $157 bi-weekly budget (Ramen noodles? Dip into savings? Another way out?), stay tuned for next week’s post, when I’ll give you the full recap on my month without credit cards and how this experiment changed my spending habits.
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 commentOkay, as a big cash spender i have the following tips for you:
1.) Keep track of your cash spending. If you have an iPhone i recommend the Spend app. Makes keeping track of small purchases very easily. You can even categorize them and then email yourself the list at the end of the week. It will be ever better when they update the Mint.com Android/iPhone apps to help with this. If you don’t have a smart phone, get yourself a small note pad (they have really small ones with built in pen). Dont worry about the receipts. They will fill your pocket and you will put off recording them.
2.) When you record your cash transactions: round up. Throw the rest of the change in a bucket/piggy bank. At the end of the year i usually have ~$600 in my change bucket to do something fun.
3.) Record all your cash transactions for a few months to figure out where you are spending your money, then do an audit and ask yourself if you really need to spend that much on Starbucks. Cut the different category amounts down to something reasonable and set up a budget in Spend or Mint. Then withdraw that much cash at the beginning of the month/on paycheck day, and don’t go to the ATM until the next month/payday, even if you run out of cash. This will help with the over spending.
I hope that helps someone!
Forgot to mention an added benefit to suggestion 2 is that the $3.15 Starbucks drink suddenly becomes $4.00. I find this helps me put the purchase into perspective on whether i really want it.
Wow. I thought that this series might be interesting and inspiring to people who are trying to buckle down on their finances. It doesn’t even seem as if Julia is TRYING.
I can only hope that my own children are financially educated much better than you have been and that they aspire to live more responsibly.
This just makes me sad.
i moved to san francisco not to long ago and have been amazed at how many places are cash only. i’ve been forced to carry cash, and i’ve found it to be extremely annoying most of the time. i don’t spend less, i just have more paper to keep track of and spend more time tracking what i spent money on. credit cards whenever possible for me.
Well, credit cards have cash back options. Last year, I got about $500 back from Chase Freedom. I think the problem isn’t whether you are using cash or credit. It is your OWN spending habit. I actually have a harder time tracking my cash expense, especially those $1/$2 purchases. With CC, you can use mint.com to keep track all of your charges, so you know how much you spend it. With Cash, you have to manually enter it yourself and I will forget what I spend my $5 on Monday. Also, if you carry cash, you lost it, it’s gone. With CC, you lost the card, you can cancel it right away. I’m still going with CC.
I think it’s great to use cash whenever possible. Monthly bills pay online, but everything else cash. Money from pocket handed over to someone, or a financial institution, makes the process more real. Yes, your hard earned money is being spent on lunch and gas, as it should, but suddenly you’re more aware of HOW you spend your money than taking the easy approach of just handing over the credit card.
It’s true most establishments will not give receipts unless asked, just ask. Keeping track in black and white, not to mention taking the time to write it down, is key in the process of money relationships. Kudos to Julia!
Where’s week 4?
I’m curious to know!
All good advice as far as it goes.I am in debt so far I will never see the top of the heap again. Why? glad you asked. I decided that after my wife had her stroke and the medical profession got through with me, I could not make it on ssi. the result was that I tried to start a business on line. first mistake. I believed that people were honest. Second mistake, I figured that there was a bad egg in every dozen. third mistake, I tried again. result, hold on to your hats, I am now over 70,000 in debt.I have to get my website to make money but I need to find an honest person. Truth be told, I don’t think that this is a possibility. I am honest, if I wasn’t you wouldn’t know how deep I am in the pile of dodo. I am 82 years old, I always paid my bills and still do. problem my poor wife gets the best care I can give her, but she doesn’t eat out. we go to church as often as I can get her dressed but her life is hell And I hate it. I will let you know how I am doing. good luck to the rest of you. F.S.
I have been using cash for almost a year now – I can honestly say that I have never once run into a problem getting a receipt for my purchase. There may have been a time a cashier forgot to ask me if I wanted one, but in every instance, they were able to easily reprint one quickly. It’s a myth that you can’t get receipts for small purchases – I get receipts for purchases under a dollar on a weekly basis.
On that note, I’ll offer some of my own advice. I keep every receipt for every purchase made. I quickly file them away in manilla envelopes labeled by month, and throw them into my file cabinet. It takes me less than 5 minutes a week. With rubber bands around them, they take up less than half a drawer. I am amazed at how many times I’ve gone back to find a receipt for a return, a recall, a rebate, a problem with my product that I’d like the company to replace, an inaccurate charge (frequent with restaurants/tips on a card) etc. I also know that I have everything that I need at tax time and in the case of audit.
Because all of my receipts (including cash purchases) are tracked, (I use Quicken) it is easy for me to quickly locate the date of that purchase, find the folder, and find the receipt. Plus, tracking every purchase, including cash purchases, allows me to know EXACTLY what I am spending each month.