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52 Different Ways to Save $100 Per Year: Shop With Cash {Week 30}

Every week in 2013, I’ll be sharing a different way you can save $100 this year. If you do all of these things, you’ll be able to save over $5,000 this year alone! Many of these things will likely be things you’re already doing, but hopefully all of you will pick up at least a few new ideas or some inspiration from this series.

Week 30: 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 it…

You will very likely see significant savings if you shop with cash.

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 that was a “great deal” when paying with your card.

$2 might not seem like much, but if you spend $2 to $3 more every week, that 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 cash 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.

Need more convincing? I highly recommend that you read these articles: 4 Reasons I Use Cash Instead of Credit, 6 Reasons People Argue Against Cash Envelopes — And Why I Don’t Buy Them, and 5 Ways a Cash Budgeting System Will Change Your Life.

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 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 cash envelopes when you shop for the next 3 months.

2) Go to the bank and withdraw cash in the amount of your pre-determined Cash Budget. 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 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!

By the way, if you want to stick with a budget, but you tried the cash system and it didn’t work for you, I’d heartily recommend checking out Mint.com then. It’s a great way to stick with a budget, while not having to mess with cash envelopes.

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

Other posts in the 52 Different Ways to Save $100 Per Year series

  1. 52 Different Ways to Save at Least $100 This Year: Bake Your Own Bread (Week #1)
  2. 52 Ways to Save at Least $100 This Year: Make Your Own Coffee at Home (Week #2)
  3. 52 Different Ways to Save $100 This Year: Ditch Your Cable Package {Week 3}
  4. 52 Different Ways to Save $100 Per Year: Order Prescription Glasses Online {Week 4}
  5. 52 Different Ways to Save $100 Per Year: Make Your Own Homemade Cleaners {Week 5}
  6. 52 Different Ways to Save $100 Per Year: Make Your Own Homemade Mixes {Week 6}
  7. 52 Different Ways to Save $100 Per Year: Become a One-Car Family {Week 7}
  8. 52 Different Ways to Save $100 Per Year: Surround Yourself With Frugal Friends {Week 8}
  9. 52 Different Ways to Save $100 a Year: Eliminate Disposable Products {Week 9}
  10. 52 Different Ways to Save $100 a Year: Cut Your Own Hair {Week 10}
  11. 52 Different Ways to Save at Least $100 Per Year: Use Cloth Diapers {Week 11}
  12. 52 Different Ways to Save $100 Per Year: Become Best Friends With Your Freezer {Week 12}
  13. 52 Different Ways to Save $100 Per Year: Rent Movies for FREE {Week 13}
  14. 52 Different Ways to Save at Least $100 Per Year: Ask for a Discount {Week 14}
  15. 52 Ways to Save $100 Per Year: Cancel Your Gym Membership {Week 15}
  16. 52 Ways to Save at Least $100 Per Year: Get the Best Bang for Your Buck at Yard Sales {Week 16}
  17. 52 Different Ways to Save $100 Per Year: Grow Some Of Your Food {Week 17}
  18. 52 Different Ways to Save $100 Per Year: Cut Back on the Soda Pop Habit {Week 18}
  19. 52 Different Ways to Save $100 This Year: Buy in Bulk {Week 19}
  20. 52 Different Ways to Save $100 Per Year: Price-Match at Walmart {Week 20}
  21. 52 Different Ways to Save $100 This Year: Ditch Your Landline {Week 21}
  22. 52 Different Ways to Save $100 This Year: Refinance Your Mortgage {Week 22}
  23. 52 Different Ways to Save $100 Per Year: Follow a Local Deal Blogger {Week 23}
  24. 52 Different Ways to Save $100 Per Year: Use a Coupon Database {Week 24}
  25. 52 Different Ways to Save $100 Per Year: Plan a Weekly Menu {Week 25}
  26. 52 Ways to Save $100 Per Year: Strategically Use Daily Deal Sites {Week 26}
  27. 52 Different Ways to Save At Least $100 Per Year: Shop at Aldi {Week 27}
  28. 52 Different Ways to Save $100 Per Year: Buy Used Books {Week 28)
  29. 52 Different Ways to Save $100 Per Year: Buy Used Clothing {Week 29}
  30. 52 Different Ways to Save $100 Per Year: Shop With Cash {Week 30}
  31. 52 Different Ways to Save $100 Per Year: Eat Less Meat {Week 31}
  32. 52 Different Ways to Save at Least $100 Per Year: Is this really a good deal? {Week 32}
  33. 52 Ways to Save $100 Per Year: 3 Ways to Save on Online Orders {Week 33}
  34. 52 Different Ways to Save $100 Per Year: Turn Your Clutter Into Cash {Week 34}
  35. 52 Ways to Save $100 Per Year: Get Organized {Week 35}
  36. 52 Ways to Save $100 Per Year: Have an All-Cash Christmas {Week 36}
  37. 52 Different Ways to Save $100 Per Year: Sign Up for Swagbucks {Week 37}
  38. 52 Different Ways to Save at Least $100 Per Year: Cut Your Fuel Costs {Week 38}
  39. 52 Different Ways to Save $100 Per Year: Frequent the Library {Week 39}
  40. 52 Different Ways to Save $100 Per Year: Simplify Birthday Parties {Week 40}
  41. 52 Different Ways to Save $100 Per Year: Brown Bag It {Week 41}
  42. 52 Different Ways to Save $100 Per Year: Make Your Own Snacks {Week 42}
  43. 52 Different Ways to Save $100 Per Year: Use a Programmable Thermostat {Week 43}
  44. 52 Different Ways to Save $100 Per Year: Limit Eating Out {Week 44}
  45. 52 Different Ways to Save $100 Per Year: Get a Bang for Your Buck on Travel Expenses {Week 45}
  46. 52 Different Ways to Save $100 Per Year: Don't Pay For Pre-Made Baby Food {Week 46}
  47. 52 Different Ways to Save $100 Per Year: Eat More Beans {Week 47}
  48. 52 Different Ways to Save $100 Per Year: Make Homemade Cards {Week 48}
  49. 52 Different Ways to Save $100 Per Year: Shop At More Than One Store {Week 49}
  50. 52 Different Ways to Save $100 Per Year: Eat From the Pantry {Week 50}
  51. 52 Different Ways to Save $100 Per Year: Stay Home More {Week 51}
  52. 52 Different Ways to Save $100 Per Year: Develop Contentment {Week 52}

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64 Comments

  • Tiff says:

    I am just now realizing this important tip. After last week my husband and I re-examined our budget, and I ONLY bring cash to the grocery store now. I have my grocery envelope and my weekly allowance (mad money, food out etc) I really can already see the savings, I also feel like it makes me more savvy this way 😛

  • My husband and I really want to go cash only but I am so scared of losing my purse or the cash! Anyone have a solution for that fear?

    • HI Alisha,

      We use cash only but have it divided up into several envelopes – one for gas, one for groceries, one for “fun”, one for household/clothes/etc. and the like. We only take the gas envelope if we’re going to buy gas. We only take the groceries envelope if we’re buying groceries. So our whole cash for the two weeks (the time between our pay periods) isn’t with us at any one time. It does require planning ahead but it also means way fewer impulse purchases. (Note: I pay for parking 2 days a week so I carry the cash for that all the time, that way I don’t get stuck and I carry it in a different part of my purse than my other cash.) Since gas is our biggest chunk of change, we also break that up per tank so we only carry cash for a tank’s worth of gas at a time.

      And if I loose my purse or something gets stolen, I only lose the cash. I don’t have to worry about someone getting into my checking or my credit cards.

      I hope you get other suggestions too – I’d love to hear what others think!
      Hope that’s helpful!
      Lea

    • Meredith says:

      Realize that it rarely happens. I have been paying with cash for a long time and I’ve never lost it. I actually don’t use envelopes rather a wallet that has four different sliders for cash. They are each labeled for each thing we use, groceries, entertainment, eating out, and clothing (I use my card for gas….sorry, can’t get used to going into the gas station). So, I can just carry the single wallet in my purse. It’s masculine enough that my husband doesn’t mind carrying it. I actually think it’s one worry you don’t have to stress over.

    • Tiffany says:

      I agree, only taking the envelope you are going to use at the time! I take my grocery money to the store. I leave the other at home.

    • Erin says:

      I have that fear also, so I only take a week’s worth of cash ($100 for a family of 4) out at a time. I just stop at the ATM first when I take my weekly errands trip. That way if it gets lost or stolen (neither of which has ever happened) it wouldn’t be a huge loss , especially since I spend most if it right after I take it out 🙂 However, we only use cash for grocery, personal care items, household products, entertainment, clothing, gifts and other misc. purchases. All our bills are set up on auto-payment and we use a credit card with a cash reward (paid in FULL each month) for medical expenses, car maintenance/repair, and gas (to control $$ spent on gas, I fill up the tank the first of each month and make it last all month).

  • Gina says:

    I’m sure that this is absolutely true, Crystal. It is much easier to stick to a budget with the cash in hand. However, I think it is equally valid that credit card rewards CAN be helpful. Between my husband and me, we have 3 credit cards (one joint and one in each of our names to maintain good credit history) and we save rewards earned throughout the year and cash them in in Dec. or Jan. – right about the time Christmas presents have been purchased. Last year, we had $600 in credit card rewards – money credited right to our accounts! I know Dave Ramsey says no one ever became a millionaire from the Discover Card (and he’s right!), but boy was that $600 a blessing for giving gift to our family!

    • Tiffany says:

      I agree to a certain point, but credit card companies make millions off of interest on your money. I have gotten a little money back on a credit card reward from discover before BUT I had to spend a ton on that card to obtain it. The interest was not worth it for me and my good credit, I decided to now pay cash!

      • Nicole says:

        Agreed that the credit card companies make a lot off of interest, but if you pay your balance in full each month, they don’t make a cent off of you. But, if you have rewards, you make money from them! We currently have a target Visa card, because I grocery shop at target each week, and it saves me an extra 5%. That really adds up over time, especially when I do pretty much all of my grocery shopping there. We also have a discover card, but we pay it in full every month and earn rewards. I saved my rewards for months when I was pregnant with our first son, since I was going to be out of work without pay for a few extra months. When he was born, we had $500 built up that paid for our groceries for those few months I wasn’t getting paid. It has been a huge blessing at Christmas time to be able to pay for many of our gifts with our discover rewards through amazon, especially knowing that we didn’t pay one cent more for the things we charged, but earned money back from it!

        • Patty says:

          True, I think the credit card rewards can be very helpful also. I use a system with both cash and credit. I pay every major bill I can with credit, such as utilities and phone, etc. I use cash for groceries, spending money, etc. I use a card affiliated with a major hotel chain, so I have saved hundreds, if not tousands, of dollars on hotel rooms over the year. It makes getting a hotel for out of town weddings, a weekend away possible. The hotel chain is very nice and a full breakfast also comes with the room. Sure, I am not getting rich off of it, but I am getting a reward that I may not otherwise would have been able to afford. Pay the cc bill as soon as it comes, in full and the card companies aren’t making money off of you.

    • Louise says:

      We have gotten probably at least $1,000 income (rewards) from our credit cards over the last six years. We pay no interest and pay our credit cards off every month. We even prepaid our home mortgage and when I was within a few months of paying it off, I actually took out a cash advance on of our cards when they had a special with no fees and no interest of approximately $11,000. I had already planned to have it paid off in a few months and did. I do agree, however, that you probably save money with cash but my husband doesn’t want to do it that way and I figure we probably equal about the same or even come out ahead by paying our house off early and saving close to $150,000 in interest!

      • Louise says:

        I also pay certain bills each month, telephone, internet with my credit card. No risk of overspending there but I get the rewards too.

    • debbie says:

      You can MAKE money from credit cards. First – you must pay them off every month – that way you are paying cash. Think of them like a debit card. My last 4 card offers gave back $500 in gift cards with sign-up and 3 month of use. That’s $2000 free right there. You earn airline rewards as well. I’m always getting free gas and gift cards. Use them as a debit card to pay all your bills, groceries, etc. and earn, earn, earn. Good credit pays off – don’t mess it up.

  • Carrie says:

    People who think they can use credit cards the same way they use cash may be deluding themselves. Behavioral economists have learned that credit cards do not induce “pain of paying” the way debit cards (to a lesser extent) and cash do. Dan Ariely has a great video on this topic.

    And people who use credit spend on average 12-18% more per transaction. When McDonald’s began accepting plastic, the order size jumped 47%.

    • I am strictly a credit user and do feel the “pain of paying” when I go home and transfer the money from my bank account to the credit card. I do agree that there may be many credit card users that do spend more, but remember that generalizations do not apply to everyone. Personally, I HATE carrying cash and want to get rid of it as fast as possible, so I tend to spend it more freely than when I charge it. When I see my credit card statement, it tells me exactly how much money I have spent that month in total. I don’t see that with cash, so the pain is actually less in that sense.

      Here is a flip-side scenario. If I have a $50 grocery budget and I have all the groceries I need for a total of $40, with a credit card, I am more likely to just stop there. With cash, I KNOW I still have $10 to spend so I may go looking for something to “splurge” on that week just so I won’t have to deal with having cash on me. I know not everyone shops that way, but that is how it works for me, so I am certain I am saving money and spending less when I use my credit card over cash.

      • Rachel says:

        We are the same way!

        Cash in my pocket is gone in days while we stay under budget when using our debit/credit cards. We actually tested this for 6 months both ways and finally gave up on cash and went back. We have a debit card just for our groceries (with 5% cash back) to keep us from overspending at the store and then put other small things on the credit card, as long as we are under budget for that category. Mint helps us keep track of where we are each day.

    • Patty says:

      I don’t think anyone is doubting that most cc users will spend more than with a credit card. However, you have to be honest with your own habits and see if you can responsibly use credit the same way you would use cash. If you can treat credit the same as cash, then why Not? Credit card companies count on the fact that MOST of their customers will not pay the balance or run up a balance. That is why they offer all the incentives, because people will spend more. I think it takes a wise consumer to learn to play the game and benefit from it.

      Using CC for your own benefit is just another way to benefit financially; just like folks here will spend time doing swag bucks, rebates, etc. I’d argue to even say that if oh are careful, you can “EARN” more than $100 using credit cards, rather than save $100 by not using them. To each their own.

    • sarah says:

      Nice explanation. I think I spend far more each month on my card than I would cash.

    • This is just a guess, but I’m guessing that most of those behavioral economists were not debt free (including mortgage) at age of thirty-five, all while being considered “low-income”.

      Just be aware of the risks before you pull out that card. Be responsible.

  • Karen says:

    I would love to go to all cash, but I can’t afford to lose my credit card cashback bonus! It’s how we pay for gifts throughout the year and for Christmas!

    I may try to do it with JUST groceries though….I tend to get off track at the grocery store and all cash would keep me more accountable.

  • Tammy says:

    I have always used cash-only for my grocery shopping/household items budget. This year my husband and I are going to withdraw cash for Christmas shopping so we stay on budget!

  • Jamie says:

    I’ve been trying to get on this system for awhile and just haven’t stuck with it. I did, however, start buying gas gift cards from CVS for the gas station I always gas up at. I get $100 for two weeks and the gift cards come in $50 increments. This allows me the convenience of paying at the pump but I only have this much money so I stay on budget with gas.

    Now, side question for those who are faithful budgeters. How do you account for the extras? When money isn’t super tight, how do you determine if you’re “allowed” to buy flowers for the front beds or a new book? How do you categorize purchases like that??

    • Denise says:

      I budget money each week for “fun money” and I also have a savings account set up where I stash money for “annual expenses.” Basically I totaled up everything we spend money on 1-4 times per year (new phones, insurance, household repairs, car repairs, oil changes) and took that amount and divided by 52 and that amount goes automatically into that savings account each time my husband gets paid on Fridays. It has really helped us budget for things that can otherwise sneak up on you! You could easily add a line for “books” or “flowers” or “treats” into that budget!

    • Heather says:

      We have an “other” category in our budget for those random things. But we do also have a “garden/yard” category, so that’s where the flowers would go.

    • Diana says:

      If I want something extra, I have to save in another category first. I have $50/month that goes towards household expenses, so if we have to replace leaky pipes, no extras that month. However, I also allow myself to purchase something if I go under in my grocery shopping. For example, this week, my grocery bill was $77 instead of the $90 I have budgeted. So, I thought I had a little extra! But then my baby girl got sick and I had to buy pedialyte and some other “get better” treats. So, there went my fall mums – haha. Maybe next week!

  • Denise says:

    For about 3 months we’ve been doing this! (well I have been but I do most of the grocery shopping!). I’ve been doing baby steps though just doing cash for groceries and eating out. I still pay our other bills through online bill pay through my bank.

    I have already spent TONS less using cash for these two areas! If there is something we truly need I might make an exception but I think I’ve made that exception ONE time in three months!

  • Kim says:

    When I switched to the cash envelope system, my food budget went from $250 a month for one person, down to $150 per month, then down to $125 per person per month, then down to $100 per person per month, & is now at $80 per person per month (or $20 per person per week). The first time I went to pay cash for chips, the cash really did hurt more!! And I put the chips back on the shelf without purchasing them. It helped my waistline too!! 🙂

  • Sidney says:

    Thank-you, Crystal, for at least acknowledging that there are some people who can stick to a budget and still use credit cards.
    I enjoy listening to Dave Ramsey (who I believe is the championing force behind the cash envelope system) and have read a couple of his books, but I get annoyed when he goes on and on about how EVERYBODY who uses credit cards overspends, and NOBODY can stay within a budget while using credit cards. That’s just not true – and I know that because I’m one of the (apparently extremely rare!) people who does it. It bothers me when people use those absolute statements because it implies that nobody has self control when it comes to money – again, not true! I was raised in a family that budgeted and managed their money well, and I’ve been doing the same since I got my first babysitting job in the 6th grade. There are people who can, and do, stay within a budget, save money, invest wisely, give generously, and still (gasp!) use credit cards. I have absolutely nothing against people using only cash – and have a ton of respect for them if they are people who can’t control their spending while having credit cards in their wallet. But, just because they may need to use that “tool” to stay within a budget, doesn’t everybody needs to do that.
    And now I’ll step down off of my soapbox… 🙂

    • Lori says:

      Agreed! I am most definitely a very responsible credit card user who has scored thousands back and free airline tickets galore! All while paying for things like utilities that we must have. And using my credit cards does not make me spend more than I would with cash either. Trust me, I’m frugal and love to save! Okay, off my soapbox too.

    • Stacey says:

      You are not alone in responsible credit card use! I agree that credit card use can be a bad idea for some people, but for those of us with good financial self control, they can be used successfully and CAN be used to save money. My husband and I have been married for over 22 years and have used credit cards our entire marriage. We have never paid a cent in interest and have earned thousands in cash back bonuses. We hAve also saved money when credit card company went to bat for us for a poorly performed service by a plumbing company. If we had paid cash (check) for the poor service we would have been out the money, but the cc was able to put a stop on the payment until the issue was resolved.
      I can see both sides of the coin here, but I don’t think everyone can. Imho, to write/proclaim that there is only one correct way to manage money is both
      ungracious and wrong.
      Ok, off my soapbox, too.

    • Kristen says:

      I completely agree!! Another person who does well with credit cards and still feels the pain of spending.

  • Cindy says:

    Cash forces me to choose between wants and needs. Just last week I decided that buying extra on sale Peanut Butter, was a smarter decision than on sale ice cream.

    The other side effect is that it keeps me from being coupon lazy. I am a pretty good couponer, but sometimes I get worn out and decide that $.55 isn’t worth it. When I’m on a cash budget every penny counts, and I see the coupon savings in how much further my money goes as well as being able to cushion next week’s budget. (That peanut butter from above had a manufacturer coupon that I was diligent enough to track down resulting in purchasing 3 jars beneath my buy price and essentially getting a 4th one for free!)

    “Seeing” the savings is a huge motivator for me

  • Mary says:

    Our situation is slightly different than most. My husband and I operate a small dairy farm. We used to have 2 bank accounts, one for the farm and one for personal, both with checking and debit cards. My husband took care of the farm one and I did the personal. He would transfer money each month into my account and I would pay for everything with my debit card. 2 months ago, I totally gave up my account and now use only cash for everything. Instead of transferring money, my husband goes to the bank twice a month and withdraws cash for me to use on all the household stuff. The only things that cash isn’t used for are the utility bill and satellite tv bill. For those, my husband writes a check and we mail the payment. I even pay the phone bill in cash right at the phone company (cell phones, no land line). I only take a minimum amount of cash with me when I go to town, just what I figure I need for what I have planned. He still has the debit card for the farm account, but only uses it maybe 4-5 times a year and he primarily uses cash for all the farm-related purchases. I absolutely love it. It has stopped me from making several impulse purchases because there was no way I could possibly pay for them. It also saves me gas money since my favorite gas station offers a discount for paying with cash.

  • Angel says:

    Can’t do it…. I live by the motto, “if you can afford to carry it; you can afford to lose it.”
    I can’t afford to lose it or have it taken from me for that matter.

  • Shu says:

    I used to be motivated by the convenience and rewards from using credit cards, and we pay off our balances every month. However, I decided to give cash a try earlier this year, and I am saving on average close to $100 per month! I am so much more disciplined about my purchases when I shop with cash, because I just have so much in my wallet (I only take the planned amount of cash of the week to the store). Sometimes I feel like I’m missing out on the rewards, but then I realize that I have to spend a lot more money to earn the small amount of rewards I get. I used to love using my rewards towards gifts and treats/”rewards” for myself, but in the grand scheme of things, I save so much more with cash than those rewards will ever be rewarding me.

  • Christine says:

    Well, I disagree!

    I MAKE $300 a year, at least, by using my Discover credit card for everything!

    I have not paid a cent of interest or fees in the 7 years I have been with Discover, but they have paid me THOUSANDS for using their credit card INSTEAD of cash!!!

  • Becca says:

    I am good at sticking to my grocery budget thanks to an app called “Out of Milk.” We use our cards to earn points and I use that app to make sure we’re within our budget. I’m usually under budget thanks to couponing and sales.

    Now, I will agree that cash is best if you never want to go over budget. It’s harder to part with cash, whereas a card you have no emotional attachment.

  • Diana says:

    We definitely benefited from a cash only system. However, once I made new habits, I was able to go back to using my debit card. I much prefer my debit card (we have no credit card) and I am able to always stay under budget at the grocery store. However, it took my several years of disciplining myself with cash only to get to this point. However, you can go back to a debit card if you’ve learned self control 🙂

  • Olivia says:

    I do happen to be one of those rare people who stays under budget without using cash. But I would love to share one of my secrets for doing this! When I grocery shopping, I always round up to the nearest dollar. So if milk is on sale for $1.87, I estimate that it will be $2. I do this for every purchase and keep track on my grocery list. I do this because it’s a lot easier to add up whole numbers than decimals. I always come in under budget. This will definitely help make sure you don’t overspend, even while using the cash system.

  • Maybe it was the years of having no choice but to stick to my budget, but I am one of those people who can use my credit card and still not go over my budget. I use my credit card for everything to “make” money from the rewards program. My card allows me to make numerous payments through the month, so twice a week I pay off whatever has posted to the account. While I am out shopping, I know what my budget is for groceries, entertainment, fun, etc. I make sure to keep my purchases to that amount by using the same strategies you listed above. In the end, it is the number on the register that matters, not how you are paying. Having said that, I understand that many people do struggle with being self disciplined enough to not go over budget, so using cash is perfect for them.

  • I think the most important thing a cash-only system provides is conscientiousness. But I think the same thing could be achieved by committing to writing down your purchases after you make them, and keeping a tally of how much you have left till that line item of your budget is used up.

    • Betsy says:

      Sorry if mentioned…. I have been trying to pay cash for groceries since I wanted to get a better idea on how much I really spent. But I do bring my credit card with me, just in case I need it. But that need, isn’t for cute shoes.

      For those that love their points, maybe see if you can pay utility bills etc by your card, if not doing so already. that way you can try the cash way for a bit but still getting points.

  • Janine says:

    We tried the cash only system with groceries/household items for a few months, but it was making things very complicated because some of my items I buy online, and then if I have pulled cash out for the month already, I have to put some back in. My husband and I got kind of frustrated with not knowing how much I might spend online if a good deal comes up, and not knowing how much cash to get out at a time. Does anyone have a good solution to this? I have gone back to using a debit card (we haven’t used credit cards at all this year which has been a huge blessing with our tight budget!). However, I do tend to go over my budget more with debit. I am not careful enough especially when buying from the bulk bins or produce which is figured by price per pound. I would love to just use cash but am not sure how to do it without all the hassle. I do like the idea of rounding up on my grocery purchases. Does anyone have any other suggestions?

    • Sarah T. says:

      The only time I have bought online is when I do Azure Standard. I have separate budgets for that and the rest of my groceries. That way I don’t go over my max, no matter what. Our budget is really tight right now, and I’m just not buying extras nor stockpiling. I keep passing up good deals. And I’m okay with that.

      There are several cards that you can get that work like a credit card, but are preloaded with money. You could get one of those and use it exclusively for your online purchases. That way the money has already been added to the card and you won’t have to keep transferring money back and forth. There’s a Visa Vanilla card that you can get but there’s an activation fee- which would cause you to really consider how good the deal is, since you’re paid for the ability to use the card. There’s also a Bluebird card from American Express you can get for free and add funds for free (link a bank account or add cash at Walmart, I believe) that would provide the same service. You can buy online, but it’s like a separate account just for those purchases. Hope that helps!

  • Corrie says:

    I use my debt card and stick with my budget. I am more likely to spend everything I have if I carry cash. Last week I spent 15 dollars under what I had budgeted. If I had cash with me I probably would have been grabbing extra snacks and junk I do not need just because I have money set aside for the store. I also get money back on my debt card, usually 15-20 dollars a month, which would more than cover 2 or 3 dollars a week if I did go over what you suggest many people do.

  • Victoria says:

    We use cash envelopes for gas, and eating out. I find it makes a big difference especially for eating out. One week I did not make it to the bank and I thought we were doing well with eating out turns out by the end of the week we were significantly over budget! We pay cash for gas because we get a good discount at our local gas station when we do so. I use to pay for food with cash but then I found myself stealing from the envelope to pay for eating out ( a bad habit of mine) so I switched to using my debit card for that category and found that now the money piles up and I can do a big stock up when I hit the larger cities that have more places to save than my town and that let me drop the amount we spend on groceries. So I guess it is a matter of playing around to see what works best for what category for you and your family.

  • sarah says:

    I’m one of those only plastic, pay it off each month people. However, I agree with you that it allows me to spend way more than I would if I used cash. I also think only using plastic sends a confusing message to my children, as they don’t see any hard-earned money changing hands. I’m going to try a cash system one of these days and see what type of difference it makes to my monthly spending.

  • Tracy says:

    I have been using the Cash envelope system for about a year now. I first started out using cash for just groceries. It does save me money. The extra benefit is I can take my son to the store with me and he does not ask for extras anymore becasue he knows that the cash in our envelope will go only so far. So if he wants something extra he brings his own cash envelope with money he earned.

    • Devon says:

      I use a strange, combined system of cash and credit. A few months ago, I decided that I wanted to try the cash-only system – but then I realized that the rewards I earn on my credit card can be used to pay down my student loan. Still, I did overspend because I didn’t have the emotional attachment to the card. So I decided to create one. This is going to sound silly but…I made my own monopoly money. That’s right. I got some green printer paper and cut each piece into six pieces. What am I doing with this money? I put it in envelopes, just like you would cash. I have it broken down into grocery, gas, entertainment and household. Whenever I go to the store, before I make a purchase, I pull out the envelope and take the amount away that I calculated will be my total. (I have one piece of paper for every dollar in my budget) I calculate in whole numbers so if I estimate my total to be $4.32, I would pull out 5 pieces of paper and put them into my ‘spent’ envelope. Then I will go and pay for my purchase with my credit card. Sometimes I mess up and have to take a few more ‘dollars’ out but that’s rare and it’s from an error in calculation, not because I decided to buy a candy bar at the last second.

      Anyway, the point is. This system gives me the visual representation of cash while still allowing me to use my card and get the rewards to pay off my loan with. It may seem a bit complicated, but once you get used to it, it’s super easy and it’s saved me $100s already!

  • Christine Howieson says:

    One of the reasons we use our credit card is because we earn cash back for using it. However, we spend so much, the savings isn’t so great. I have thought about buying a gift card to the grocery stores we shop at at the beginning of each month to help us manage our budget. We still get the points for spending it on the credit card (we don’t have to have cash laying around, or make an extra trip somewhere), but when the money is gone on the gift card, it’s gone.

    My other “problem” is I have an 8 month old, 2 year old and 4 year old. We barely get out of the store without tears when I rush around to grab the things on my list. I can’t imagine having to pull out a calculator each time. We need to do it though…

  • Ashley says:

    Here’s my important tip: Only carry enough cash with you for the time frame you are shopping for. I often carry my whole two week grocery budget in my wallet but go to the store shopping specifically for this week. Wanna guess what happens? That’s right, I dip into next weeks money and then next week I break into my debit card and spend any money I might have put into savings. Every dang time.

  • Robyn says:

    When we went through Dave Ramsey, we switched to cash only, and I was amazed at how much less we spent in a month.

    And we were really responsible credit card users! I was guilty of adding the extra “bargains that I couldn’t live without” and going over in groceries almost every month.

    A year later, we’ve found a balance that allows us to maximize credit card rewards…basically, we use cash for groceries, household expenses, dining out and entertainment. For more “fixed” expenses like gas, recurring monthly charges (netflix and internet), we use a credit card and take advantage of the “perks.” We’re not spending more in those areas because we use credit cards, and we never pay interest.

    We were unique in our Ramsey class that we weren’t in debt, other than our house. We were already living below our means, but through careful planning, we’ve been able to really maximize our money and plan how we want to spend, rather than just spending it all and wondering where it all went.

    I think personality is unique when it comes to credit cards. For groceries, using cash was a radical shift…especially at Costco! :-p

  • Sarah T. says:

    I’ve been tracking our grocery spending (along with all other spending) for the past 3 years now. While I have a set budget, when I pay with a credit card, I only have a general idea of how much I spend. Paying with cash gives me much more clarity as to how much I have left, not just how much I’ve spent.

    Tips I’ve learned:
    – Budget for groceries weekly. I’ve done monthly before, and almost always go over because I didn’t save enough for the end of the month.
    – Write out a meal plan. Then you know exactly what you have already and how much you’ll need.
    – Shop once for the whole week. I look at the fliers, write down what I need to buy and how much each item is. Then I know exactly how much money it’ll cost to buy needed ingredients, and how much wiggle room I have for the non-essentials (half-and-half) or extras due to a great sale.
    – Be flexible. If I find a good price on marked-down bananas, I’ll skip the apples. If I want tacos one night but beef isn’t on sale, I’ll hold off until it is.
    – There will always be another deal. We’re working hard to pay off our house, so we’re buying as little as possible right now. I’ve run across a few great deals I would have normally stock-piled. However, it has been so fun to see God provide exactly what we need when we need it.

  • Katie says:

    I totally agree with how easy it is to spend more on purchases with plastic. But the problem with being cash only for us is all the gas money spent coming back to the house to get the cash envelope. And all the cash lost because my husband will use the self-checkout, pay for a single gallon of milk with a $20 (or, heaven forbid, a $50) and forget to take his change. That’s a good 10-20% of our monthly food budget when that happens. People say, “Oh, well when there’s actual tangible MONEY on the line, anyone will learn to change these habits.” And I’m sure that’s true of many people, but I’m not married to one of them.

    I’d rather go to an all-plastic system with some sort of real-time budget tracking system, but I haven’t got a smart phone so I can’t use any of the apps people recommend for that. About the only solution is to manage all the money myself, which I do for the most part, but I can’t take away my husband’s credit cards (he needs to charge stuff for his work all the time) and I never know when he’s going to say, “X is more important than a budget.” 🙁

  • Betsy says:

    This is where my cash-only attempts have failed: I make a target run. I get some groceries (budget area #1), an item for the house (area #2), diapers (#3), and lets say a clothing item for one of the kids (#4). Even with my cash system in hand, I’m trying to pull the right cash from 3-4 different sections, and unless I have all 1’s, it’s never exact. So maybe I have a $7 home item, but I have a $5 or $10 bill. So in the end, I’m “borrowing” from a different budget section and spending a lot of time sorting it all out at home – especially if I don’t have the exact right bills in the system to trade out. With my debit card, I go home & pretty quickly break up the purchase into 4 sections, post to my budget & I’m done.

    So those of you who successfully only take cash, how do you manage this? 4 separate purchases? I’ve thought of that but the pressure of holding up others in the line has always stopped me =)

  • Susan says:

    I still like the debit card system I keep to a strick budget and yes keep track in my head, on my banks website, or I have been known to drive to a ATM and just get my balance.
    I have in the past used the cash on hand system, but I spent it faster then if I had to think before I swipe.

  • Meg C says:

    I do a lot of my shopping at Target and I use both a credit and cash system. I walk in with a cash budget, buy what I came in for, pay at the register with my Red card to save 5% and extend my return period, and then go to guest service to pay cash to pay off my card right away. It might not suit everyone, but for me it’s the best of both worlds.

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