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31 Days to a Better Grocery Budget: Shop With Cash

Missed the first posts this series? Read them here.

Up until this point, the posts in this series have been pretty non-controversial. But today, that’s all changing, because I’m going to make a bold statement:

You will very likely see significant savings on your grocery bill if you only shop with cash.

I know all of you “But-I’m-So-Responsible-With-My-Credit-Card” people probably aren’t going to be happy with me for saying this, but I really believe that.

You see, when you shop with a credit card (or even a debit card, for that matter!) you can have your budget in your head and you can do the best to stick with it when you check out, but it’s so much easier to go just a little bit over here and there when you’re swiping. You can justify that $2 you went over your budget to buy something which was a “great deal” when paying with your card.

$2 might not seem like much, but if you spend $2 to $3 more on groceries every week, that’s adds up to around $130 in extra spending over a year’s time!

Paying with cash forces you to stick to your budget.

When I know that all I have to use at checkout is the cash in my grocery budget envelope, you better believe I carefully evaluate every impulse purchase or great deal I come across: “Do I really need this?” “Is this in the budget?”

Sometimes, it truly is a great deal and I have the money in my cash envelope to pay for it so it goes in the cart. Other times, I decide it’s a good enough deal that I skip buying something else on my list that we can do without in order to afford it. Or, many times, I put it back on the shelf.

The Cash-Only Challenge

Maybe you’re one of those extremely responsible–and very rare!–people who can stick to your budget while swiping a card. If you are, kuddos to you!

However, if you find yourself struggling financially and wishing you could figure out why your grocery budget is so high, can I challenge you to take a Cash-Only Challenge for 3 months and see if it impacts your grocery spending over the course of a three-month period?

Here’s how the Cash-Only Challenge works:

1) Commit to only spend what is in your grocery envelope for the next 3 months.

2) Go to the bank and withdraw cash in the amount of your pre-determined Grocery Budget. Put this cash in an envelope and keep it in a safe place. For more on cash-only shopping, read The Envelope System Experiment.

3) Leave your credit/debit cards/checkbook at home and only bring your cash envelope and a calculator with you to the grocery store.

4) Calculate your purchases on the calculator as you add them to your cart. This will motivate you to carefully evaluate all purchases, will make you aware of how much items actually cost, encourage you to look for the best deal, and force you to get creative if your list is longer than you have room for in the budget.

5) Pay with cash when you checkout and see significant grocery savings–hopefully!

6) Decide you’ll never go back to paying with your credit/debit card. Well, okay so you might not get quite that drastic, but I can almost guarantee you that going cash-only for a short-time will have taught you something worthwhile!

Have you tried a cash-only system? If so, what benefits have you found from doing so? Tell us your thoughts in the comments.

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  • Crystal Brothers says:

    This is what we have been doing and it has been great! The only thing I found to help my DH visualize the goal and get him excited about our budget.

  • Shelly says:

    We have been doing Dave Ramsey for about 3 years and I dont have a debit/atm card. I pay cash for everything. Our bills go directly to our bank which we then authorize payment. I use a prepaid fuel card, which saves me 10c per gallon at our gas station (and saves me from walking inside to prepay when my baby’s asleep). And I set aside a certain amount for groceries, and allowance for other things. I am much more aware of what I am spending, and have learned to live without. My husband was laid off last year, and the extra “cush” in the bank was a comfort I could never buy in a store. Highly recommend it!

  • maura says:

    I have never tried cash only but I did start last month on a new grocery budget. I am cutting my grocery bill by 25% and so far so good. I am a little over this month (week 3) but I did buy a large amount of meets and froze them for the next few weeks so now I wont need to buy that next week. I am still way under what I used to spend and I am feeling great about that . I may need to give the cash only thing a try. Right now I have an envelope in my purse and every time I buy I put the receipt in the envelope and right a running total on the outside for that week.

  • Nicole says:

    We don’t do cash only, but something very similar. My husband and I are on food stamps at the moment, so that’s an extremely strict budget right there. and yet, I can’t seem to feed the two of us for a month on what we get! Which is why I’m here, of course.

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