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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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  • SusanE. says:

    How many of you do the cash and coupon grocery adventures with your children? It seems that whenever I shop with my daughter, who is 3 (and #2 expected in May), I just can’t think straight, shuffle the coupons, tally up amounts on grocery items. and keep her entertained. My husband wishes I would spend less at the grocery store, and I do try, but just can’t focus with a little “helper” with me. Do you all leave your kids at home with dad or do you have other little secrets?

    • Kathy says:

      @SusanE., Susan, your right at times it can be stressful with little ones. I normally have to take both of mine (2 yr. old and 11 month). I usually have my list and coupons in a small seperate binder from my larger binder of coupons. When I come to the store I already have the coupons matched up either from a website or the weekly circular. I do the math at home before I go to the store so I have a strong estimate of what I will be spending before I get there. I come to the grocery store with snacks for the boys and toys/books if needed to entertain them. Some trips are better than others but overall if I am prepared things usually go well,not always but mostly. I also do carry my calculator in case I need it for a surprise clearance item. I hope this helps and feel free to ask questions if you would like. I know that others have even more experience than I.

    • Kim says:

      @SusanE., I have a 2.5 yr old and 1 yr old (and two more in school). And after many headaches, I either find someone to watch my kids or wait until evening when my husband is home. I have always taken my younger kids with me but like you said it’s HARD! It also helps to have a list and a plan so you don’t have to hit every part of the store. If you have to take her with, take small toys with that she hasn’t seen for awhile. And if possible get the cart with the truck in front.

      • Emily Kay says:

        @Kim, I’m like you, I’ve tried it with my 2 and 1 year olds and it is SO not worth the stress! I’ll do it if I just have a few items to purchase, but for big trips I wait until I can leave them home with the husband.

    • Melody says:

      @SusanE., I used to shop once or twice a month before I had my son and it would take an hour or more. Once our son was born, I started shopping about once a week. We slowly built up a stockpile and now when I go to the store, I generally only have to get ten items or less. I shop the weekly ad, have my list and coupons set aside and also have a really good idea of what my total should be. I also try to write my list out according to how the store is laid out, so I’m not running around back and forth.

      Something else that helps me, if I am doing some kind of promotional deal where I have to buy a certain amount of items or a certain dollar amount, I keep a few alternate items in mind with coupons pulled just in case they are out of something I want. This is usually when I get the most flustered, when something in my scenario goes wrong. so I have started writing alternates on my list. 🙂 Takes a little more in planning, but saves me so much headache at the store.

      Plus, also shopping when my son is well fed and well rested helps too!

    • Christina says:

      @SusanE., I usually shop with my toddler (almost 2). We go right after he eats breakfast. I usually take a snack cup and sippy cup, and a book or stuffed animal. When all else fails, I entertain him with my cell phone.

      I LOVE shopping without him; it’s so much more efficient. But most weeks, it works best for our family schedule if I take him with me (DH is in grad school so it allows him some time for studies).

    • @SusanE., I am due in early July and have always shopped with my DD who is 3. I used to give her a little purse of her own with things for her to look at or a little photo album or book. Now she is content with the free cookie from the bakery and she watches people. My real issue these days is lifting her into the cart, as she’s over half my height and with my pregnant belly it’s getting hard to pick her up!

      • Lucky says:

        @Milk Donor Mama, I go on Friday nights after my DS goes to bed. I have a hard enough time thinking in the store let alone trying to keep track of things and him. I know I spend more when he’s with me because I lose track of what I’ve got in the cart. Plus, it gived me a little time out on my own.

      • Emily says:

        @Milk Donor Mama, I have an “envelope system” for coupons.

        I review sale flyers and coupons at my leisure when my kids are napping or in bed, then I take a junk mail envelope and write: KROGER (or another store) on the front of the envelope. Then on the back of the envelope, I write out my grocery list and stick coupons that I want to use inside the envelope. Then when I’m ready to go shopping (with or without the kids), I use my grocery list envelope that I’ve pre-made for the store I’ve chosen.

  • Kris says:

    I have just started paying with cash. I am amazed at how I have nickle and dimed us to debt with my debit card. I have always used it rationalizing that I was “paying cash” because it was coming directly out of our account instead of going on a charge card. I am excited to really get control of our finances!!!

  • jan says:

    I have always used my Discover Card for groceries and drug store type purchases. I do pay my card off each month and stick to a pretty tight budget. However I started a cash-only experiment this month and it has been pretty eye-opening. I use three envelopes- Grocery Store, Drug Store, “blow” money. I can share between the three but once it’s gone it’s gone. Cuts way down on going overboard on deals- and treating myself to Diet Cokes at the check out line 🙂

  • Em says:

    I completely agree with you, Crystal. I like to think I’m a “responsible card user” (though for us it’s debit, never credit). I get on my soapbox about grocery budgets and menu planning and coupon shopping more often than I should, and then when I forget to hit the ATM I pay the price for my arrogance. Every single time I use my card, I go over … even if I’m using the list, even if I’m using the calculator, even if I’m trying to remind myself constantly not to. Every time. It’s like clockwork. The psychology of having to hand over cash is a huge, using a card (whether 100% responsibly or not) cannot have the same effect. The horror of having to take something off my order after checking it all out because I’ve gone over is a huge motivator to stay under budget.

    Cash works. Every time.

  • Nancy says:

    We’re on our 6 month of using cash only for purchases and it is AWESOME! It is so hard keeping track of credit card expenses in my head that I always under estimated how much I spent. I would just grab stuff off the shelves, thinking that I could cover it. Using the debit card was just as difficult. Now, I just get what is on my list. Most months, I still have cash left in my envelope. Plus, I am able to budget a lot less. It’s a win win situation.

  • Ashley says:

    We started using cash only the beginning of 2009 and have saved so much money. Our grocery bill went way down along with all our other purchases. We’ve saved so much money that I was able to quit my job to stay at home with my daughter AND pay off over $18,000 in consumer debt last year.

  • Laura says:

    This is also a good way to demonstrate to any household members who may accompany you on your shopping trip exactly why you can’t have steak for dinner every night or candy in the checkout line. Cash is so much easier for everyone to understand as opposed to that piece of paper we call a budget that says we aren’t supposed to spend more than the set amount.

  • Melody says:

    We use cash for EVERYTHING! We follow Dave Ramsey’s plan and use the envelope system and it has made such a huge difference. We really think twice (or three or four times) about whether a purchase is needed or not. It’s much harder to make bigger purchases when you see the amount of cash dwindle down and knowing that’s all you have left for the rest of the month. It definitely keeps me in check when at the grocery store. I plan my trips meticulously based on the weekly ad and buy only what I need. If the money isn’t there, we improvise with something from the pantry.

    Knowing that there are certain things that we have to buy (ie milk, fresh produce), it really makes me think twice about taking advantage of a super sweet deal on, for example, fruit snacks. Even if it is a great deal, if the money coming out of the fund takes away from being able to buy milk, we can’t do it.

    I read someone’s comment about how it is easier to throw cash in a vending machine and spend it more quickly. We combat this by both my husband and I having our own “personal fund”. If I want a soda or a Starbucks, it comes out of my pocket, same with my husband. That way this isn’t taking away from our allocated funds.

    I honestly can’t imagine going back to debit/credit cards! With cash, it is so much easier for me to track. I still track our grocery trips to help account for money out in rebates and total savings (coupons, discounts, rebates, etc), but I don’t have to balance a check book at all, which is heaven!

  • CJ says:

    Count me as one of the few people who can use a credit card and still be frugal. I put the majority of my grocery purchases on my Discover card and pay it off every month, and enjoy the cashback bonus I get from all those purchases. I dont have to make trips to the bank/ATM and I dont like carrying cash. If I run into an unexpected great deal I dont have to pass it up or make another trip back to the store.

  • AmyF says:

    We only use cash for Groceries. And we are also in a cash only mode when it comes to other housing bills. For bills we use prepaid credit cards and it has worked really good to organize and save.

  • Debbie says:

    I find that “cash only” works when I have a small purchase to make – eggs, milk, etc. It keeps me on my toes and prevents me from buying things I don’t really need right now. If I’m doing my big monthly shop, I use the credit card, as it gives me discounts and great coupons (it’s a store CC). I’m also wary of having cash around. Contrary to most people, we think twice before swiping the credit card, and we don’t go over budget, but we don’t always think twice before spending cash. I can track my CC spending online, but with cash, there’s often the feeling of “where did all that money go?”

    Great blog, btw. I’m your newest follower. 🙂

  • janaki says:

    do you guys keep some money for emergency…. i always keep around 50 bucks in my handbag and never use it on any of the purchase but still like to carry the 50 bucks with me becoz it makes me feel safe

  • Melissa Radcliff says:

    I use cash to pay for groceries also. I had tried many times before without success until I tried it with a twist. Instead of dividing money into multiple envelopes for different things, I put it all together. If I manage to stay under budget in one category I can be more lenient in another or save it for next time. If I go over budget with something like groceries then we have to forgo something less important like dining out; so we only get to eat out if we’ve behaved ourselves.

    I don’t feel comfortable with leaving the debit card at home though; what about emergencies? It wouldn’t be good to be 40 miles from home with a couple of flat tires and no money. We’ve also been out before when we got the call to rush to the hospital for family where we ended up staying the night without going home, so we had to hit the vending machines and the cafeteria.

  • Jaime G says:

    I remember reading some statistics before…not sure where, though… that people who pay with their credit/debit cards spend roughly 27% more on average (or a % close to that… I need to go look it up!). Anyway, I remember being AMAZED when I first read that!

  • Bonnie Jones says:

    Thank you so much for doing this post. I have just started the envelope system and it has worked really well for me. I didn’t do it at first because I didn’t think paying with debit was the same as a Credit card I soon found out it was for me since I was always going over budget. I now leave my debit card at home and only pay cash for groceries, dates, gifts, and other home items. It really works and I try to remember that if I really want something it usually always can wait another week or paycheck.

  • Sarah says:

    I’m in. I’m reading everybody’s posts… and I KNOW I fall into the “I think I’m responsible” category. My initial problem is not having a meal plan. I decided at 3:30 yesterday that I wanted Chicken Pot Pie for dinner, but didn’t have any frozen mixed veggies. Hubby got home, I ran to the store, found great deals, and came our $20 poorer. For a $2 bag of veggies. Could I have come up with something else from my EXPLODING pantry? Yes! Okay, I’ve already overspent this month and we’re only 9 days into it. Eat from the pantry challenge for March! Then start taking my grocery money out of the ATM each month. Thank you for your encouragement. You’re right- until this post, it didn’t challenge me directly. Arg! I hate it when I realize how short I fall in areas.

    • Mandy says:

      It took us 3 months to really get a handle on our budget and using the cash system. I thought, “This will be easy – I can do this in the first month.” I felt like you when I falied miserably. Don’t get discouraged and know that with persistence, it will work for you, too. PS: It also helps to not send the DH shopping. I don’t even let him come with me anymore because we go over our budget when he’s there.

    • Kathy says:

      @Sarah, Just wanted to reiterate not to get discouraged! Just take one thing at a time, that is what we are having to do too. We are just getting our feet under us in this also. It has been a joy to learn all of this and begin applying it to our lives. We are all learning though, none of us are perfect. I am so encouraged by your desire! Our family is so different from a year ago and we will just keep getting better and yours will do. Don’t get discouraged!

  • Susan says:

    I am up for this challenge!! I would say I use debit half of the time and cash the other half. I definitely spend more when I use debit. I have a bad habit of stocking up on deals even if it means going over the budget a little.

    • Susan says:

      P.S. When I use cash, instead of using a calculator to keep total, I just keep a running tab on my shopping list envelope. I round up just in case. I would probably use a calculator if I didn’t live amongst people that are running a rat race and sometimes get verbally angry if you are in front of an item for more than 3 seconds! =P

  • Barrie says:

    I have been shopping by cash only for several years. At that time, my hubby and I sat down to do our budget and we decided how much cash we needed to take out per pay period. This included things we paid for cash with and things we needed to save for such as insurance. We purchased zippered, cloth pouches and labeled them (haircuts, groceries, wal-mart, insurance, dog food, dog medication/vetappts., etc). Each pay period, the money alloted (which is also written on each pouch) is placed in the pouch. I use a lot of coupons (saving on average at least 40% per trip) and when the cash runs out, I stop shopping! So I better plan carefully so we have staples for the end of the pay period! It has worked great for us, we have been able to actually have a savings now!! I have also heard that David Ramsey’s Total Money Makeover suggests this…we were doing this long before I heard about his book:) It DOES work, ladies, but it does take time getting used to also. I had issues when we first started out since I was used to purchasing whatever I wanted and whenever I wanted.

  • Jenny says:

    We started the cash envelope system about a year ago. We aren’t full blown Dave Ramsey(ians), but we are working towards reducing our debt and using cash for all possible expenses. We have about 16 envelopes (categories) and we love it. I have only reduced my grocery budget about $40 a month over the last year, but am working on slimming it down even more this year. I love the challenge of only being able to spend what I have and stick to it, so it makes shopping that much more fun. Yes, I think its fun!
    Since we’ve stuck to cash only, we actually feel like we have more money than we did when we were living on our debit/credit cards!

    • Mary Kate says:

      @Jenny, $40/month is almost $500/year. In ten years that’s almost $5000. That is nothing to sneeze at. I think it’s a big deal.

      • Jenny says:

        @Mary Kate,
        Good Point!!! I’m trying to shave another $30-$50 off each month. I’ve just started “stockpiling” so hopefully I’ll get better at that and won’t “need” things as often.

  • Pam says:

    I have used the “cash only “system for 2 years now and it has changed my shopping habits forever. I now never wonder how much is left for the week, or when too much is. I find that it’s much harder to hand over a 50 dollar bill than it is a debit card. Actually seeing the money leave my hand made me not want to spend as much.
    I live in a big city and there are way too many opportunities to spend money. Having a cash system, and only taking with me what I need for the day has helped me stop all the impulse purchases too.

  • We returned to using cash envelopes for groceries in January. Not surprising, we are spending less each week than we did using our debit card. It’s just too easy to justify going over by even a small bit when using the debit card. Cash gives me a clearly defined limit.

  • Tracy says:

    I consider myself to be very frugal and disciplined but tend to fall into the extra dollar or 2 here and there “trap” far too easily!

    It seems cash also brings out my deepest creativity – I always want to see exactly how far I can stretch it, and thats if I spend it at all. Parting with hard cash is not easy!

    Cash is king!

  • Tania says:

    My husband & I went to a cash-only grocery system a few months ago. It has been a wonderful thing! If you only have so much, you can only spend so much! I go in to the store with my coupons & a calculator to keep track of how much money I am spending. The major thing I have noticed is that we no longer have tons of food that we “thought” we needed going bad in our cabinets or fridge. I wasn’t thrilled about it at first, but it has been a blessing! I am also a lot more frugal with my cash then I am with my debit card. There is just something about physically seeing the money leave my hands that makes me rethink almost EVERY purchase. I’m very glad we switched to this system.

  • Crystal-

    I couldn’t agree more. Since going to cash our grocery budget is shrinking. We have a lot of food allergies and I justify the extra cost, but when I put my mind to it and use cash – we do spend less!


  • Chris says:

    We have used cash for groceries for about 5 years and about the first of the year we switched to a system that involves using debit for groceries. DH discovered a checking account that has 4% interest if we make at least 10 debits per month. Anyway I like the interest in generates, but I am sort of wondering if it the same trap that putting it all on a credit card generates. So far in the first couple of months our expenditures have said about the same, but it is way harder to feel like we have a good handle on it.

    Also since small business people often get hammered with fees when they take your credit card you can often get a discount with cash if you just ask 😉 while I haven’t taken a careful accounting of it I suspect it has saved me as much in a year as some peoples credit card bonuses.

  • Kimberly says:

    We’ve been on a Cash-Only budget for 2 years now and we love it. We have a debit card but we only use it once a week to get the cash for our envelopes. We don’t have any credit cards at all. We have saved so much money since going to a cash budget because it truly is harder to spend cash than swipe a card. We’ve also decluttered our home because we no longer make spur-of-the-moment purchases. I wish we’d done this a long time ago!

  • Maureen says:

    I am a firm believer of the only cash method. My husband and co-workers are surprised that I don’t use credit cards for the “rewards” but I truly believe that I really do spend less when I have to pull out cash and look at it.

  • Melanie says:

    We just switched this month from doing cash to using a debit card for groceries and other household expenses…but the reason was that even with cash, my husband (who is an accountant…maybe this is why?) insisted that I keep every receipt and balance all of the envelopes. So if I went to the store and bought groceries AND something else for clothing, home or whatever, I had to transfer cash around and record it on the receipt. It was a big hassle, and drove me crazy every month. We’ll see how the debit card goes, but I wish he would be okay with doing cash without the receipts! I’m glad to hear that I’m not the only one who thinks that the whole point of doing cash is so you DON’T have to worry with receipts!!

  • Mandy says:

    We went from a “all credit card” system to an “all cash system” last fall. (Thanks, Dave Ramsey!) I can say wholeheartedly that it has made a HUGE difference in how we spend our money. I think it also offers more flexibility, without breaking the overall budget. For example, there might be a week when we don’t use as much in our “dining” budget, so that can supplement groceries/household, if I find a good deal. The best part…I don’t have to worry about tracking my credit card receipts. Once the cash is gone, it’s gone.

    My DH left his job in December, and is still looking for employment. If we had not moved to a cash system with a solid budget before that happened, we would be in a world of hurt financially. I strongly advocate the use of the cash system!

    • Jenny says:

      I agree! I feel like we have more money now than ever before when it was so easy to swipe a card!!! And, yes, when its gone, its gone!! And we don’t feel deprived of anything we want to do!

  • When we got serious about our debt reduction (thanks Dave Ramsey!) in September of 2007, we went to the cash only system. I cannot even begin to tell you the difference it has made in my grocery purchases. The biggest difference was the amount I spent. If I were to guess, I would say that using cash alone cut my grocery bill by 40%. That coupled with making more things from scratch, and just being more conscience of our purchases, I’ve cut our grocery bill a total of about 60%!

  • Renee says:

    I have always used my debit card to buy groceries, because using cash can be a “pain” sometimes. It is so much easier to swipe a card. I have had a budget for years, but I always do go over at least some…and some months I go over by quite a bit. I don’t know where I get the money to cover the overages – something usually has to give at the end of the month and I am usually so relieved when my husband gets paid again. At the beginning of this month I decided to try cash for groceries. I have been really “extreme” couponing since last summer and I wanted to see if this step will make a difference. This whole experiment has been in an effort to just cut the amount of money we waste and the couponing has worked so well, that I can’t believe it. I have been married 21 years and I thought I knew something about frugality. Boy, was I wrong, lol! So, I thought…”give cash a try…it might work like the coupons did.” I carry it in a ziploc baggie…I put every penny in it and paper would not hold up to the change. I received one rebate check so far this month and it was so fun to tuck it in with the tangible grocery money. I will let you know how it goes, but I will tell you that I am already much more aware of where my budget stands for the rest of the month.

  • Sarah says:

    I’ve been using cash for about 6 months now and it makes a huge difference!

    I was worried about having an embarrassing moment at the cash register. A couple of times, I’ve gone a little bit over, or I’ve thought I might. (It’s hard to be exact when you are also buying taxable items, even if you have a calculator.)

    However, the cashiers have always been kind about it. I will tell them that I only brought a certain amount of cash and will ask them to please give me a subtotal because I might need to put an item back. One cashier was very impressed that I was able to stick to such a budget, even though I had to put back one can of tuna.

    I should also add that, even when I’ve decided not to purchase something on my list so that I can purchase something at a great deal, I’ve always made do with what we had at home. You don’t really need to have a ton of variety in your pantry all the time. You just need enough to make the meals on your plan for the week!

  • jenny says:

    We became officially “debt-free” (except for mortgage) last spring using Dave Ramsey’s cash envelope system. Sometime, thereafter, I convinced myself that I was sure I would be just as careful using debit/credit cards so that we could reap the benefits of the rewards system. Thanks for this post, Crystal, it has challenged me to go back to the cash envelope system just to be sure that I am indeed being as careful as I think.

    I would add that I think that with the debit/credit system it has actually asorbed more of my TIME in actually tracking the spending to the penny. When we had the cash system we always knew where we stood in each category the moment the purchase was made.

  • Annie says:

    Thanks to your encouragement, Crystal, we went cash-only back in January for EVERYTHING! We’ve seen a tremendous difference in how much money we’re saving in every category. We’ve used an electronic budgeting software since we’ve been married, but nothing compares to having cash in hand.

  • Betsy Durand says:

    I really see the advantage with this. However, I usually use my debit card for this reason– I receive points/cash back if I use it as oppose to another form of payment. I do have to work hard, though, to stay within my budget and make sure I do not spend that extra $5 more. The savings with the cash back/rewards program has been beneficial, though. Just a thought!

  • Stephanie East says:

    I love it! We have been doing cash only for three years and it truly works. I do save less. It is a great discipline in many areas. It was difficult in the beginning but now I cannot imagine using a card to purchase groceries.

  • Jenny says:

    just started with cash for groceries and other “variable” expenses and have been amazed by the changes! I thought I was thrifty and careful since we paid off the credit card balance every month, but it really makes you stop and think before you hand over cash. That and I feel so much prouder when I hand over a $20 bill and still have money left in my grocery envelope, something that you just can’t experience if you pay with plastic (credit or debit). totally recommend it, it’s changed how I budget and view spending money.

  • We’ve tried it both ways. We just got more cash out if we needed it. We actually spend less using our credit card, because we are dedicated to paying it off each month, so we are more careful with it than we were with our cash, because we know we have to be under a certain amount to still pay off the mortgage, other bills, etc. I know most people aren’t like this, but it is how we are. Actually, the best thing for our budget is for me to do the shopping. My husband buys way more on impulse (good things and good deals, but outside of the budget) and good deals that he can’t resist. When I asked him to go to the store for me, I’d ask if he could stick to the list. He told me he could not keep that promise, so I do the shopping, unless I’m in desperation.

  • Jennifer says:

    I guess I’m one of those rare people that can stick to the budget, down to the dollar, when using my debit card. Because I know that if I don’t, I won’t have money in the bank to pay my other bills. My budget is that right – there is no $1 or $2 extra for those great deals. I make a detailed grocery list and estimate the cost of each item before I leave the house so that I know I will be at or under my budgeted amount. Simply knowing that I can only spend X amount each week or else the electric will be turned off is enough incentive for me to stick to it, even when swiping a piece of plastic.

  • Jennifer says:

    That should say my budget is that “tight” not “right”… and I also wanted to mention that I track every dollar spent on Excel like someone else said. It helps!

  • sabrina petee says:

    I agree. Everytime I try to use my debit card, I go over. Cash is so much better for staying on a budget. Also, we went through Dave Ramsey’s course for getting out of debt and that has helped. Research shows that our brains register pain when we use cash. We will spend 10% more with a card because it doesn’t signal pain, its pleasure.

  • This post comes with perfect timing to my life. I used to be one of those “responsible” credit/debit card users. Funny thing was we always seemed to go over our budget(ha ha ha! Responsible right?). It hurt us because paying down our debt was moving at a snails pace. This past summer we began using the envelope system that Dave Ramsey promotes. This was a step in the right direction but our cash only system was still flawed. We were putting our entire month budget into one envelope and by mid-month we would run out of cash. I then would have to live out of our pantry and freezer (great experience) for the last two weeks of the month.

    Just recently (last month) I put my foot down. We were living off of cash but still extremely stressed. I began separating our budget into categories and using more than one envelope (thanks to kelleigh’s free envelop download. So Cute!). It was the first month that I felt FREE! Amazingly I had money left over in some areas, and my grocery budget lasted the entire month. Now if I choose to not grocery shop and live our of my cupboards it is my choice and not my budgets.

  • Erin says:

    I use the cash only system for the grocery store, and for the little play money my hubby and I get each month.

    I love the cash system! It works so well to keep me in check. We use our monthly cash envelope for everything – grocery store purchases, walmart purchases, going out to eat. It really keeps us honest, especially with going out to eat. It’s easy for me to stay in budget at the grocery store, but when it comes to going out, it’s so easy to say “oh, let’s just stop at wendy’s”… but if there’s no money in the wallet, then it can’t happen! Or if I want groceries the following week, then it can’t happen! 🙂 It’s kept us honest, and it’s helped me to realize how much I can get for a small amount! I also keep my money in a cute fabric change purse I made, so I’m not searching for an envelope that is sure to wear out with the leftover change.

    Another idea is to toss all the change you get back from using cash into a jar at the end of each month – helps you save a bit! When you get enough, you could go out for a nice dinner 🙂

    • Shelly says:

      We also put our extra change into a jar and use that to pay our kids for their chores. My son has a change jar and when it is full we take it to the bank where he puts half in his account, and half he can keep to spend as he wishes.

      • Erin says:

        @Shelly, That’s a great idea, Shelly – we don’t have kids yet, but I am definitely going to keep that in mind for when we do. I love that he can spend half of his jar, and keep half, great way to teach kids how to spend but also that they get a reward from their hard work. We already have a spare change jar, so this will be easy to implement!

        Mind if I ask how soon kids should start to receive money for chores? *Clueless* here!

        • Shelly says:

          We just started enforcing this with our son who will be 7 at the end of the month. My daughter who is 3 does not do this, but I reward her with letting her pick out a dollar item at Target or something like that. For our son, I have a chore chart. It has a morning list…make up your bed, brush your teeth, be happy…and an evening list…put your backpack and shoes up, do your homework (with a smile), put your plate away, etc. He earns 10c for everything he does (without too much complaining), and 50c for every A he brings home on his report card and tests…not daily worksheets. I also have an extra chore in there a week like windex the mirrors, or dust. If he does it he earns the money, if not…he doesn’t. Then I dont find myself nagging him as much and it gets done either way. This works for us, and believe me when I say Ive tried lots of different things! Good luck in the future! 😉

  • Kathryn says:

    It’s completely true–extensive shopping/marketing studies have proven time and again that people simply spend more when they pay with plastic (even debit cards). Psychologists speculate that something about handing over the actual money puts a check on people’s buying impulse.

  • debby says:

    I don’t do cash, but I do gift cards. I buy a gift card to my grocery store of choice at the beginning of the month and charge it down. At the bottom of my receipt it tells me how much is left on the card. If I have $90 and 3 Mondays left in the month, I’d better dig through the freezer and pantry to see how creative I can be!

  • Jill says:

    I would love to do the envelope system for groceries and more but my husband is leary about keeping all that cash around the house. I like the idea of taking cash out for the month and when it is gone it is gone. Any ideas.

  • Sara says:

    Thanks!! This is a great suggestion that I never gave much thought. I am bringing cash next time to see how I can do!! 🙂

  • lauren says:

    I have tons of trouble with the whole keeping the grocery bill down. If I have a debit card I can sometimes spend twice what I would with cash! Even with cash, I still can’t seem to skip some of the great deals that week to always be under my budgeted amount. For times where there is no wiggle room in my bank account I always use cash only!

  • Suzanne says:

    I have used the cash only system. Last year I experimented with it and yes, it worked! Then the kids and I went out of state to visit family for 6 weeks and I just got out of the habit. I think this is definitely something I need to implement to shave down that budget. Simple concept. Common sense. And yet it takes so much self control. Thanks so much for this series. I really need it right now!

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