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How We Switched From Debit to Straight Cash

Guest post from Cassi who blogs at The Fitness Failure

About a year and a half ago, my husband purchased Dave Ramsey’s Total Money Makeover and it drastically changed our lives. We learned how to budget our money and save money by using cash.

Our first decision was to implement the envelope system!

We had tried using cash to pay for groceries in the past but inevitably we would turn to the debit card when we went over. We solved this problem by purchasing an inexpensive calculator that I could use to keep track of our total as we shopped so that we would not go over.

I learned to take my time shopping and pay close attention to prices. The longer I used the envelopes, the easier shopping became. I also realized another added benefit to the envelopes — they held my coupons that I needed for any given shopping trip and eliminated the possibility that I would forget my coupons at home.

Since switching to cash we have reduced our grocery bill by over $150 per month. We always have a stockpile of cereal, pasta, and other canned goods. And because I now pay more attention to the amount of cash that it leaving my envelope, I am better equipped to handle sales on items that I need to stock up on. This has afforded me the opportunity to buy more fresh produce throughout the year and has helped me to plan healthier meals for my family.

Holidays used to be a grocery bill buster, but now my husband and I plan for holidays by budgeting more money for groceries in November, December and April. We no longer have to panic when a holiday arrives wondering how we will purchase the few added expenses.

Using cash has totally transformed our lives. 

We do much less impulse shopping and we pay very close attention to where every penny goes. My husband and I are much less stressed and we have a stronger relationship as a result.

Tips for using cash:

  • Use brightly colored envelopes to categorize and organize your cash — it makes them easier to keep track of!
  • Invest in a decent calculator — one that flips closed is best if it is going to live in your purse!
  • If you don’t want to use a calculator (or you can’t find it) round up on everything and jot the total down on your list periodically so you don’t lose track.
  • Don’t figure coupons in when keeping a running total. This helps you have money left at the end of your shopping trip for things you may need to buy later.
  • Leave your debit card at home — that way you will not even be tempted to think it is okay to go over.
  • Always leave wiggle room — try not to spend every last cent so that you have cash left mid-month if you need it.
  • Don’t forget to figure tax into your total — this could break the bank

Cassi is a wife, mother, and high school English teacher in South Dakota. She loves to read, write, paint, use coupons and is passionate about saving money. She blogs at The Fitness Failure.

 photo credit

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47 Comments

  • Dee says:

    Great tips! i use the calculator on my phone ;o)

  • Lisa says:

    I like the suggestion to not factor in coupons. What a great way to “double” your savings! 🙂

  • Monica says:

    My husband and I have been “credit card” debt free since January 2012, but don’t use cash to pay for groceries, take out etc… I only take out CASH when I need it. I also don’t BUDGET our monthly expenses either. However, I’ve been using coupons for about 8 years now, so I must be doing something right. =)

  • Sarah says:

    I have finally convienced my husband to go to cash only, but he won’t start until I go back to work. I can’t wait!!! I know this is a great way to save money and all the change we get goes into biggie banks for our 3 boys. Every penny counts, right?

  • Angie Crane says:

    I literally have the Dave Ramsey book in the chair with me to read after checking in on facebook. My mom loaned me the book last weekend. What a neat confirmation I should be taking the cash theory to heart. Thank you for this article and for this great site!

  • Although I am a big Dave Ramsey fan, I am an avid user of credit cards. However, I love hearing stories of people going cash only. It’s very encouraging. Good job!

  • Ashley says:

    I love Dave Ramsey’s Total Money Makerover. Between the book and couponing my finances have done a total 180. I love the envelope system and being cash only! This system of cash only and budgeting totally changed my life!

  • Emily says:

    I’m not good at having cash in my wallet – I tend to spend it so I am much better off using the debit card. But for some people it works!

  • kathleen says:

    So you only do groceries or other things also? I’d other things what envelopes do you have?

    • Cassi says:

      We do cash for just about anything we can muster!
      Our current envelope system includes the following:
      household (for TP, diapers etc.) giving, haircuts (for me and hubby-I cut the boy’s hair myself), school supplies and lunch money, gas, car repairs and maintenance, babysitting, clothing, entertainment, and dining out. We also get cash for “blow” money-$20 goes into the boys’ envelope system as we do financial peace jr. with them (they simply have giving, saving, and spending). The balance in our three savings accounts is also broken down into several categories (including some that we get cash for so we can order some goods online cheaper) so that we know where every penny is going. Since I wrote this piece we paid off our last credit card and will have our van paid off by the end of this year. It is work, it takes time and patience but it is SO worth it!

  • Susie says:

    Kathleen, we use the envelope system and have envelopes for the following: groceries, clothing, car maintenance, car registration, gifts, blow money ($10 a week for each of us to spend on what we want like coffee, lunch out, or something special we’re saving for), miscellaneous, and an envelope marked with our daughter’s name for putting aside money each week for her. We did have an out to eat envelope but just tightened our budget so got rid of it. We’ve found using envelopes so helpful!!

    • I have envelopes for fun money, shopping (drugstore game, etc), groceries, gas, and newspapers. I also have a vacation envelope that I keep on my dresser. I alternate filling my newspaper envelope and my vacation envelope each paycheck ($20 a month). The vacation envelope goes towards whatever I need for vacation….usually extra gas or food.

  • We use the envelope system too and absolutely love it! Instead of individual envelopes for each category, we use 13-pocket expandable file. The coupon size is perfect for holding all the money. And with it being plastic, it won’t wear out as easily or quickly as paper envelopes.

    • cindy says:

      @Jenny in Utah, this is what we use also, I could not get used to the envelopes. I couldn’t figure out how to contain all the envelopes. Much easier for us:)

      • Cassi says:

        We keep our envelopes in our budget binder and we have not had to replace an envelope yet although I think we are getting close on a couple 🙂 I like only having the cash for my planned purchases. It keeps me from impulse buying from categories that I did not plan on spending from! 🙂

      • It is easier, but I started using the accordion file because I just couldn’t use envelopes. It’s what my mom used (well she was too cheap for envelopes, she used old, used envelopes.) And so I had to use something different! 🙂

  • I’ve tried keeping a running tally of my total, but I always have trouble with the fresh veggies and fruits that are priced per pound! Even if I weigh them, it seems to always come up different at checkout, I guess due to scale discrepancies. It’s a little frustrating!

    • Cassi says:

      That is where rounding up should pay off. I weight everything as well and if it comes up as 1 and 1/4 pounds I go to 1 and 1/2 just to be safe!

  • Catherine says:

    Yes, my husband is the same way. Cash slips right through his fingers. At least with debit there is a record showing where the money went!

  • Deb says:

    I cut up the credit cards months ago. But just recently lost my debit card 3 weeks ago. Canceled it and didn’t order a new one. So we have been cash only for 3 weeks now. It means more planning and I only take the amount I know I am going to spend out of the house with me. I think eventually I will need a new card. But for now working baby step 2 (Dave Ramsey).

    When I only have cash I can not go over or spend more then intended. As long as I don’t carry more. It can seem to burn a hole in my pocket.

  • Michelle W says:

    Thank you for the great tips. I have not been consistant with the envelope system but I am starting over…again.

  • Jo says:

    We started the envelope system almost 3 yrs ago, but the envelopes kept falling apart (we use them for everything!) We went to the dollar store & bought some plain pencil cases with zippers & use those instead- they last forever!

  • deborah says:

    I like the list of tips!

  • Dawn says:

    Talked my husband into taking the 3 month cash budget challenge starting next week. We are debt free and pay off our points credit card every month. But I know there are times we would spend less with cash, so we are giving it a try!

    I just saw some of the cutest fabric cash envelope wallets on etsy too. But I need to start an envelope to save some $ to buy one:)

  • kathy says:

    We contain our cash envelopes in a zippered bank bag. That works really well for us. Though I must admit we have been a bit slack with the envelope system lately. We are getting started back up, had to make some changes due to changes in our expenses. I have found though that fewer envelopes are better for us. We use: gas, grocery,maintenance and savings. The broader categories work well to handle extras that come up.

  • Our local grocery store has kind of a cool thing where you just walk through the store with a portable scanner and scan your items as you go — and it gives you a running total! So if you are using cash and go over budget, you can just put an item back (there’s a “delete” button on the scanner) as you’re shopping, without an embarrassing cash register moment where you’re pressured to decide what to put back nownownow. I love it!

    • Lynn says:

      That must be fantastic! My husband just asked why they didn’t have something like that – it can be very challenging when shopping with my toddler to have to try to use coupons, calculate my total, occupy him, etc – it would be great to just be able to scan as I go! What grocery store do you use?

    • Carla says:

      Our st ore, Giant, has one but I have been insecure about trying it because I am not sure how it works. I see people scanning and bagging as they go. This week I will gather up my cloth bags, and give it a try! I appreciate the encouragement!!

    • Lori Carson says:

      The grocery stores Stop and Shop around here have it too. I love it so much, and it makes shopping with my 1year old a lot easier.

  • jenny mosley says:

    great tips- enjoyed reading this post and the comments!

  • Heather T. says:

    Love Dave Ramsey, his books have changed our lives for the better! We started in April of 2011 and have been paying off things like crazy, I just wrote our last big payment for student loans yesterday. We live by the cash only policy and use a coupon binder for this. Even being preggo with #4 and having lost my job in January we are doing great, it was just a matter of changing how much we budget for what. We only use $60/wk for 5 people some weeks its tight some weeks we have leftover.

  • Sakura says:

    I nsort of use the cash system. We are working on being debt free by November. We use a combo of auto transfers, cc, and cash each month. The CC we use is paid in full each month, and I try to keep the debit card tucked away. The trick for us has been tweaking our budget each and giving each dollar we bring in a home. I always try to budget to zero, this has stopped a lot of crazy splurging.

  • Lisa says:

    These posts keep me inspired and give me hope! We live on 1 income and my husband has had his hours cut back. Definitely challenging an already really tight budget. I have done the financial peace class 2x and just started reading the total money makeover. Every little tip and idea help and it is nice to see how other people make it work. I need to work harder at the cash envelopes-seems to always be a challenge to stay under the budget, but the budget is probably a little low with how prices have gone up etc, but that is all we have to put towards it, there isn’t anywhere else to take from. Thanks again.

  • Julie says:

    We are cash for pretty much everything, but bills and gas. I get gas at Costco and you can only use your debit there. We only started being dedicated to the cash only system a few months ago and it really helps us. We weren’t very good at updating our monthly budget with what we had been spending so I wasn’t always sure how much I spent when I used my debit. Now, I am making better choices on what I spend my on money on and I am more sure of how much money we have each week. If money is not in the envelope then there is no money left in that category until pay day. I feel like it’s really simplified our finances.

    • Rita says:

      i know your post is a little old but I had the same problem with costco only taking the card and not cash and my husband was $20 us to death I now get him a gift card every month just like his envelope of cash for gas and we are doing much better

  • Carla says:

    Our store,, Giant, has one but I have been insecure about trying it because I am not sure how it works. I see people scanning and bagging as they go. This week I will gather up my cloth bags, and give it a try! I appreciate the encouragement!!

  • Cassi says:

    I love reading all the Dave Ramsey follower stories on here! He has really made our life so much easier. Thanks for all the positive comments as well-it is exciting to see my words on my favorite blog!

  • Stacy says:

    We keep trying to switch to a mostly cash system (cc for gas). Our problem is that we cannot get to a month where we can both pay off the credit card from the previous month (we pay our cc in full every month) AND have enough extra to pull cash for the following month. We’ve tried switching one budget category a month over to cash, but even with that we inevitably try to switch too fast and come up short. We have cut our budget pretty hard and we still can’t seem to get to a month where we can switch over.

  • Cindy says:

    My simplified rule is cash on anything that you can impulse on. So for gas I use my debit because it’s more convenient and isn’t something I buy unless I need. Groceries or household items are completely cash because you can easily convince yourself to stock up on a great deal or treat that is outside of your budget. What a relief to have a fixed expense for what used to be a completely unknown expense. No more worrying how much I spent on what or some shocking credit card bill. If there is money in my wallet then I can buy it, if not then I have to wait until next week no matter how much I may want something.

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