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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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164 Comments

  • Andrea Q says:

    I’m trying a cash-only experiment. The first week, I added it up in my head and I went 40 cents over, but thankfully had an extra $5 in my pocket. The second week, I had three of my children with me and ended up $3 over because I got distracted. Using a calculator would make it much easier!

  • Diane says:

    I have used “cash only” for groceries for several years now and I’ve found it to be the only way I can stick to a budget while shopping. My husband gets a pension check once a month and I portion the monthly grocery budget by the number of weekends in the month. I only food shop on the weekends why is why I’ve chosen to portion it out this way. I will make a big list of all the things I’d like to buy to match my menu plan for that week and then prioritize the items making sure to buy the “must haves” before the “I wants”.

  • Mandy says:

    I am glad you made the point about an “extra” $2 that is for a “great deal”. This happens to me all the time, and it was interesting that you pointed out how much it adds up to over a year. It’s almost always for something that truly is a good deal, not just something I want, but it still adds up!

    Thanks – your blog has been such a blessing to me!

  • Lucky says:

    I believe you about the cash thing, but I live in a city and am worried about carrying around all that cash in envelopes. So for now I’m sticking with plastic, but when we move to the county…

    My favorite new thing for sticking to my budget are the produce scales that Giant installed. You can weight your produce and print out a sticker so you know exactly how much your produce will cost. Love that!

    • Courtney says:

      @Lucky, We only carry as much cash as we think we’ll need. So if we take out $200 every two weeks, I will still only take $60-80 with me (based on what’s on my list plus a little extra for unexpected bargains). Obviously it’s different if you live in a more rural area and make fewer trips, but we don’t take all of our grocery money with us at a time.

    • Christina says:

      @Lucky, Those scales would be awesome! The only ones we have, are “for estimates” only so you have to estimate the weight, then multiply by the price per pound . . .

    • Megan says:

      @Lucky, I love that the US is finally getting with the program! They’ve had those scales in Europe for years now and they are so convenient.

      As for carrying cash – I agree with you! Though I’ve read it can be helpful to carry “mugger money” so that if you’re ever threatened you can hand over $50 and run for it.

      • Lucky says:

        @Megan, Thanks for all of the replies — even the thought of carrying $50-$60 worries me. I would never carry $200. Maybe I need to loosen up a little.

        • Kathryn says:

          @Lucky, I live in the city, too, and pay cash for almost everything. I just exercise common sense (e.g., don’t keep hundreds of dollars in my purse or flash big wads of bills) and remind myself that muggings are so rare that I’m not going to let the fear of one keep me from reaching my financial goals.

  • Susan says:

    I am new to your blog- but have loved reading it!! I quit working this past January to stay home and raise our now 5 month old daughter. It has been a challenge getting everything to run smoothly on one income- but I will do anything to make it work! I love your idea of grocery shopping with “cash only” in order to force you to stay on a budget.

    I shop at Giant Eagle and love accumulating Fuel Perks. My new challenge is also not to pay for gas!! Every month I accumulate enough in fuel perks to get a full tank of free gas plus fill up our extra gas cans which will fill my tank for the rest of the month… I haven’t paid for gas in THREE MONTHS!!!!! **It does help that I don’t drive to work every day and only drive a few times a week…

  • Elizabeth says:

    Another option if you’re nervous about carrying actual cash is to see if your grocery store has reloadable gift cards. I do a lot of our shopping at Dillons (a Kroger affiliate) and this has been a good option for us.

    There is also an option for churches and other organizations to sell the gift cards to their members/supporters and then the organization gets back a percentage of the money from the sales, including the money that is reloaded onto the cards. Our church does this and it has been helpful during a time when the economy has decreased the amount some people are able to tithe on a regular basis.

    • Sara says:

      @Elizabeth,

      The gift card is a good idea. You can’t go over the specific amount (like cash) but it is easier to keep up with if you are worried about keeping up with the cash. We are going to start doing that with gas, because I have trouble paying for gas with cash with a child in the car.

    • @Elizabeth, I like this idea too. My issue with “cash only” is that I often end up with a lot of change because I feel like I’m always fumbling around to find the exact change. But a gift card would be helpful.

      • Alison says:

        My husband and I have a huge change jar for this purpose that we use for an amusement park trip each summer. I empty my wallet of change every day that I shop and I just pay with paper money when I’m out. We don’t miss the change in our budget, and it’s a nice extra savings pile.

    • Aleta says:

      @Elizabeth,
      Gift cards sounds like a great idea. We like accruing rewards with our credit card, so I haven’t been open to buying with cash before. But with gift cards I could purchase them with my credit card, and still only have the exact amount on hand each shopping trip to keep me in budget!

  • Ellen says:

    We actually use a ‘cash-like’ system but use the credit card (so that we get $ back refunded to us). We have our entire budget on an Excel spreadsheet. When we go to the grocery store, I save the receipts and enter any numbers into the budget daily. I always check the balance so I know how I’m doing at any time during the month. It works well for us. It’s like an electronic envelope system.

    • Crystal says:

      If you want to spend $2 more than is in your grocery budget, will you not spend it because it’s not in the budget even though you might have the money on your card? Just curious.

      We find swiping a debit card–even with a detailed Excel spreadsheet budget–encourages us to spend a little more and not be as disciplined as we are with cash. Everyone I’ve talked to who has experimented with this has agreed with me as well. But you could be the exception to the rule! 🙂

      • Laura D says:

        @Crystal,
        We use a very similar method, except with Quicken. I always know what my grocery budget is and I’m able to keep it VERY low even with the card. We get 3% back on groceries by using the card so I feel I’d be losing a little money if I used cash. I still write everything down as I go through the store and add it all up before I check out. (Plus – you always know if something is wrung up at the wrong price with this method!) I still save 40 -50% (after sales price) on my groceries with matching the coupons to the deals. Currently I’m working on lowering my grocery budget even further. Last month I saved even more than the “goal” I’d set. We’ll see how this month works.
        I know this isn’t for everyone, but for me this actually works really well. But I am a number person and I love a good challenge!

        • Laura D says:

          @Laura D, Forgot to mention, we have tons of “money” on the card, but we never use it. I always have the budget in mind and I don’t want to go over. We always pay off everything right away as well. If I know I don’t have the money in the budget, I just don’t get it. I figure it will go on sale again or I didn’t really need it.

        • Becky says:

          @Laura D, I could be wrong and at this moment I do use my debit card (b/c I like the uPromise rewards I get out of it) but I think the point Crystal is making is that you can save “even more” if you use cash (not just stay in budget).

        • Laura D says:

          @Becky, We now have the budget for groceries similar to MSM’s, however, its a set amount every month. (I had a goal of lowering our current budget to this last month and we went even lower than it.) Although I do understand the benefits of a cash only policy, I do find that I am able to do just as well and use my credit card. I’m pretty determined to have the lowest possible amounts even though we don’t “have” to. That money is able to be saved or gifted and I love that! It looks like there are a few of us that do this. That certainly does not mean that its right for everyone though!

      • Ellen says:

        @Crystal, That can happen, but so far since last April – it only happened 1 time. We simply deducted the amount from the next month. We’ve used the cash envelope system, but find that this really works better for us. And we actually make money with it. God has been very gracious in helping us be better stewards (believe me, it has been a difficult road and I have only gratitude to the Lord and to Crown Financial and to others (yes, even your blog) in helping us to be more aware of what we spend & how to save. I say that with humility and lots of hard lessons learned along the way.

      • Lydia says:

        @Crystal, Ellen, we do the same, and find that it works very well. I budget for the whole month, not by week. That way if there are good deals on diapers etc. and I need to spend more one week I can just spend less the next.

        @ Crystal, I know not everyone can use credit cards and do this, but it really does work for some of us.

        Not convinced? Check out the “My Deals” section of my blog. The last several months I have been significantly under budget.

        • Kimberly says:

          @Lydia, We do the same thing, paaying on the credit card and budgeting by month. We enter each receipt and review our budget weekly, and I know how much I have left to spend. If I spend $100 the first week of the month, I know it means I need to keep my shopping trips low the rest of the month to make up for it. I hate having no money left in the budget (even though there is plenty on the card) by the end of the month, so that alone is enough incentive for me to keep my grocery store purchases as low as possible.

    • Ginger says:

      @Ellen, I agree with Ellen, that what we do except when we go to Aldi’s we pay cash.

    • Christina says:

      @Ellen, We do the same thing. We earn 2% back on groceries and gas, and 1% on everything else. We keep daily records of all expenditures so we always know how much is left in the budget. Since we pay the balance each month and there’s no annual fee, we aren’t paying a dime to the credit card company (not even in stamps for monthly bills – we pay online). I know lots of people swear by the cash system, but I think that with enough discipline you can do just as well with plastic. Plus, if I spend an extra $2/week out of my $75 budget, that’s less than the 2% we’re earning in cash back. So yes, I do make allowances and go over by 1-2% about once every 3-4 months. But that means I’m still getting more cash back than I’m allowing in overage. In the end, I’m doing better than I would be on cash.

      Like I said, I know it’s not for everyone. But it works for us.

      • Katie says:

        @Christina,

        I’m with all those who still use cards. I like using my credit card because I get points for what I spend. (My husband and I want to go on a Mediterrean cruise, and we’re about halfway there.) I do evaluate in my head if the “deals” are really “deals”. Such as, the John Freida for .99. I could do that deal, but I don’t use those products so it’s not worth it for me. I understand the cash idea though; it’s just not for me.

        • Christina says:

          @Katie, We did the cruise thing. My husband was a residential builder until about a year ago. When he built our house, we used a Royal Caribbean credit card to pay for EVERYTHING for the house – but only for the house. Then we turned around and used the construction loan to pay the credit card. By the time we were finished (and converted our construction loan to our mortgage), we had earned a free 7-day cruise for the two of us. Nice little perk!

          Incidentally, we cancelled the Royal Caribbean card after the cruise . . . our son was born and we thought it would be more difficult to use cruise points, so now we have a hotel rewards card and a cashback card.

      • Christina says:

        @Christina, I should clarify my math. $2/week is more than 2% of $75. But $2/week on occasion, totals less than that.

  • Heather says:

    It’s so true! Last year I thought I was doing great with the debit card. Then we made a zero-based budget and went to cash, and my eyes were opened. Now I won’t buy stuff just because it’s cheap (think drugstore items – we have a year’s supply of toothpaste! even if it end up “free”, it still might cost the initial investment or I might have to pay sales tax!) Now, I might “cheat” by using money out of the household or clothing envelope if I find a really great deal and I’m out of food cash, but that means I buy less in the other category. I actually make it into a game to see how much cash I can have left in several categories (gas, household, food – but not clothing because our clothing purchases are irregular) by the next paycheck, and then I set aside the extra for student loan repayment!

  • Ellen says:

    Forgot to mention – I plan out most of my grocery shopping on paper before hitting the stores, put the list & coupons in separate envelopes (if I’m separating out my orders), keep my coupon box with me (yes, I look dorky but hey, I’m the one saving 🙂 …and I DEFINITELY carry a calculator with me. It saves so much time – I know before I hit the registers what the total (minus any tax) will be. Of course, things sometimes go awry!

  • Katie says:

    We have been using cash only for a month now and it truly makes your spending go down. I find myself putting some items at the end of the pile as I am purchasing and really waiting to see if I have the money left over and how badly I need the item. The past two weeks I have brought the spending down $12 per week. Love it!

  • Becky in KY says:

    This is our first month for me to go “cash only.” I’ve been getting in on some of the great deals posted here, but some of them have required some oop that isn’t immediately reimbursed (e.g. rebates). Now there are almost two weeks left until DH’s next paycheck, and I’m already pretty low on cash. BUT your post on menu planning was right on time for me. I sat down this morning and planned out menus for the rest of the month using what’s in the pantry/fridge/freezer (which are all pretty well stocked, due in large part to the great deals you post on here!), and all I need to buy for the rest of the month is a jar of pepperoncinis, a gallon of milk, and a little fruit. AND I have plenty of ECBs right now, so the milk can come from that, and I can still take advantage of whatever CVS deals pop up next week. THANK YOU, CRYSTAL!!!!

  • I did cash only in January and was able to stick to a post-Christmas half-my-normal-budget with very little problem. In February, I meant to stick with cash, but never got around to it and used my debit card instead. By the end of the month, I had used up my grocery budget and was down to using register rewards to buy milk and eggs to get us through until payday. (I’m too stubborn to dip into any other budget, which I guess is good.)

    This month, I’m back to cash and it is truly amazing the difference it makes. Even with a set budget in a grocery-money-only debit account, there is no comparison to using cash. You just flat-out won’t spend as much when you see those green dollars leaving your purse and see exactly how much is left.

  • Lisa H says:

    We used to be in the “we can use credit cards responsibly” crowd, and even now, I don’t think we overspent that much because I really watched it and wrote everything down.
    BUT we came around to the cash system because it just made things easier! No writing everything down and tracking receipts! Just draw out the proper amount, and there you go! I do it monthly, which makes it easier for me to get the “great” deals one week and go cheap the next. Our credit card rewards didn’t add up to enough to make it worth that hassle

    Now, the only thing we use the debit card for is gas, and we use cash for everything else (well, except for paying for our tickets to visit family in England twice a year – we charge them and then transfer the money from ING and immediately pay it off. I don’t usually know far enough in advance when the great deal will come there to keep the travel money in our main account.)

    • Sherri says:

      @Lisa H, Mine is the same story- I switched back to cash for groceries not too long ago. I rarely went over budget when I used the credit card, but it was a pain to keep up with and reconcile the receipts. And for my $160 budget, the 1% I earned wasn’t enough to pay for my time.

  • Sara says:

    It’s true. It works. Back in the day when we still used cards, if I needed to run to the store to get more milk (because I didn’t plan well during my initial trip) no biggie. And when I went to get just milk, I would end up with chips and canned soup and even cosmetics in my cart. But that was no biggie because I just swiped. Now *if* I have to return to the store, I will only get the milk because I don’t like seeing my cash supply dwindle away! Just last month we put off going to the store (and we were out of sugar for sweet tea!) for three days because we were low on cash in the grocery envelope. No telling how much waiting until payday to get more cash saved us!

  • Sara says:

    BTW, having a calculator on hand while shopping is a great tip! I’ll have to try that next time.

  • Jennifer says:

    We just started the cash envelope system and it has worked beautifully! We have not even come CLOSE to what we budgeted. We start off making a menu based on what we have and then list the items we need from there using the ads. However, we are very fresh veggie/fruit oriented, so we don’t purchase hardly anything that is pre-packaged.

    Our family will NEVER go back to the debit card for everyday expenses.

  • Hi Crystal, I admit I am not a cash envelope person but just made the commitment last month. I didn’t do well b/c I spent cash & debit. So yes, this month I am starting over and keeping with a $250 CASH only grocery budget. Love you site & your opinions. Keep up the good work 🙂

    chrisitna

  • Karen says:

    I agree with so much that Crystal said! We’ve used a grocery budget and the envelope system for about ten years – Can it be that long?!?

    Anyway, one slight amendment I’d make to what Crystal said is, I wouldn’t use a calculator to add up my purchases. I add them up down the side of my grocery list. This helps for two reasons. (1) I often forget what I’ve added on my calculator and what I haven’t. Then I would have to go back and try to “refigure” it, sometimes getting prices wrong. (2) If I need to remove something because I’m going over budget, I can look back at the prices, already having an idea of the general cost, so that I know what I can remove to get my budget back where I need to be.

    • Kim says:

      @Karen, I’m stealing this idea. Love it. I always try and do a running total in my head and then get distracted and forget where I was. Plus this would also help me stick to my list.

      Thanks!

      • @Kim,

        I think I would forget what I put in the calculator too so I write it down on paper but I estimate. Every thing under $0.50 gets rounded down and everything over $0.50 gets rounded up. I’m always within about a dollar using this method. It’s amazing really!

  • Mandi Harris says:

    We just started using cash (thanks to your blog) this year. Holy cow, it has saved us a ton of money already! I was leery to switch because of the “rewards” we get with our credit card . . . we pay it off each month and get 1-3% back on all of our purchases. Each month when we paid off our card I was shocked at just how much money we had accumulated on it. It was insane! All of those little purchases, quick trips to the grocery store to pick up that “one” item, turned out to be hundreds of dollars. We have stopped using our cards and won’t be going be going back to them! Thanks!!!

  • veronica says:

    I started use cash-only one year ago and I have to say that I’ve been saving alot of money. I don’t do anymore impulsive purchases!! I stick with my butget like this!

  • Cate says:

    I’m one of the rare few who can stick to a budget while using a debit card, but only after trial and error. I discovered that instead of having a weekly grocery budget, I need a monthly grocery budget. If I overspend one week, I can account for it the next. I do keep a “target” amount in mind every week, though.

  • amy says:

    Grocery shopping with cash has allowed us to go from spending $400 a month to $250 per month in one year’s time!

  • Trish says:

    I really understand what you are saying about the cash budget but we make (typically) around $750 a year using our credit card – we pay off the balance in full every month so we don’t incur any interest charges. This income is a huge asset to my family. I have a budget for our groceries and am able to stick to it without using the cash method. I just wanted to say that some people can use credit cards responsibly! 🙂

    • jennifer says:

      @Trish, Agree! My family has been debt free for over 20 years – it’s all about discipline! I don’t need a piece of paper, (cash), to keep me on track with my spending limits – I’m disciplined enough to do that myself through other ogranizational tools. Being frugal is a mindset, it’s the same as buying a box of cookies – can you eat just one or do you have the mindset that if the box is there you will eat the whole thing? The rewards that I have received from my 529K (child college fund) credit card account has accumulated to over $10K at this point – this is from the rewards only! We use our credit card for absolutely everything and pay it off at the end of the month. Bottom line, if you are not disciplined enough with your cards – then yes, you need to get with the cash program – think of it as the first step to controlling your spending. After you are in zone of not overspending and being frugal, the rewards programs offered by credit cards are a cherry on top if you can continue to be disciplined and responsible with your expenditures. Good luck to you all!

  • Kelley says:

    Thought I would share a “cash” story with you. Years ago, my oldest son who was about 6 carefully saved his money for a He-Man action figure. He finally was so happy that he had $4.00 for it. I tried to convince him that he needed more due to tax….needless to say, after a trip to Walmart, standing in line with his little treasure, the cashier announced that it would be $4.38…his little face dropped, I didn’t offer him the money and back it went…..Yes, this is a lesson in tough love, but to this very say, 20 years later, he’s remembered and is an excellent steward of his Cash!

    • Sara says:

      @Kelley,
      That is a very sweet story. I’m sure it broke your heart and it was very hard to not just offer the $0.38 to him, but he learned such a big lesson from it!

  • momondealz says:

    This is a system I told my husband I would like to try out. He is all for it, so next pay check we will be taking the cash out, but boy will it be strange to have cash for a change instead our debit cards!

  • Rose says:

    haha…This is very good. I think most people need to be cash only. I am not a cash only person. I have the excel spread sheet that I type all my purchases in. And yep, I do go over a few dollars every once in a while…but between gas and groceries I make $400-$500 a year on my credit card rewards. I never pay interest or credit card fees. I just get that extra money for using the card. I’d have to go over my budget by $9 every single week to reach what I make in rewards. Besides, when I have cash I end up spending because it’s so easy to put .55 or so in a vending machine.

    • Lynn says:

      @Rose, I *totally* understand what you mean! It’s much easier for me to spend cash than it is to put it on my cc! We pay it off in full every month (never any fees or interest) and it earns us hundreds in cash back bonuses. When I have cash it’s easy to spend $1 here and there, but I’m much more reluctant to charge something. I’ve done the “cash only” thing and ended up spending MORE. I can see how “cash only” works for many people and helps them reign in their spending, but I honestly think we’re all wired differently and a one-size-fits-all and only one method works is not acknowledging this.

      • Christina says:

        @Lynn, Me too! When I think about how much money we have, I think about what is in the bank. If it’s cash, in my mind, it’s already gone. If I’m putting something on the credit card, though, I actually go through the thought process of “this is going to come out of the checking account”–whereas the cash is already out, so I’ve already written it off.

  • Julie in IN says:

    I use a cash envelope system for my portion of the household budget; I still swipe my credit card for groceries knowing it will pay me 3% back! That percentage adds up and paid me enough last year to buy a Nutrimill grain mill and a Bosch Universal mixer with the blender! What added health benefits we have found grinding our own wheat and making all 100% wheat bread, pastries and other items in our home; all fruit (some veggie) and hm yogurt smoothies are part of my daily eating plan.

    You must be a good steward of your money and own up to paying your Visa envelope with cash from your grocery envelope when you get home.

  • You KNOW I love the cash system! It has made such a difference for our budget! I was shocked when I discovered that we can live on less!

    Did you see that I’m giving away a wallet with matching envelopes on my blog! Ends tonight!

  • Lori says:

    A hearty amen to your post. I recently switched to cash for my everyday purchases, and I found that many of the things that I thought that we “need right now” could actually wait to be gotten if I am short on cash. When I was using my credit card, I would just go buy it because it was something I “needed”. And although my card usage was by no means out of control, I am finding that using cash helps me on the impulse buys and on budgeting for larger items.

  • celia says:

    When I grocery shop, I use cash only. But I have been on bedrest since January and my husband uses the debit card. He does just fine though. I plan the meals around sales, and he does the shopping according to my list. He is not tempted like I am to stockpile. So if I send him for 5 things, he comes home with five things.

  • ONLY cash is phenomenal!!! Don’t forget the Dun & Bradstreet credit card study where people spend 12-15% more when they use plastic!!! Cash opens your eyes.

  • A says:

    For all the doubters: try the challenge. I mean, really, truly try. Don’t just sort of try. It REALLY does make a difference! And for all of you who don’t like “fiddling” with loose change: cash is still our country’s currency. It is still accepted. Which means, Mr. Cool in line behind you can just wait for a micro-second for you to make your purchase. Don’t feel rushed! Don’t apologize for daring to be financially different!

  • cait says:

    I love this post. Being Dave Ramsey followers, we are very dedicated envelope people. (I even got three mini-sized one-pocket wallets from Vera Bradley to use as our envelope system for Christmas. Just to be a little more festive. Ha.) Right now we have an envelope with our “eating out” money, one with our “grocery” money, and one with our “blow” money. We have our budget in a spread sheet and get our cash out of the bank at the beginning of the month. Each week, I put the allotted amount of cash in each envelope. You are exactly right about it keeps you from spending over. Having a budget with a debit card just didn’t cut it…you can always go over. But when I go over with the grocery budget, that means less cash for the next week. It has also made me more dedicated to coupon clipping and pre-planning meals. The planning ahead, means possibly more cash left in the envelope at the end of the month that can go into savings. Being a tactile and visual person…this has worked wonders for me when planning our budget. We are saving so much money and spending so little. LOVE IT!

    As always, thanks for the great inspiration! 🙂

  • Just started the Ramsey envelope system about a month ago and it has changed everything. Now I know exactly how much I’m spending and when it’s gone, pull something out of the pantry.

  • Katie says:

    I am a cash only girl. I thought that I could be responsible with the check card, but you do spend more. As I go through the store I add it all up on my calculator…

  • Marcie says:

    We started using cash (envelope system) back in October. I was so surprised by how much it has saved us! And I feel like there is freedom in using cash. I always felt guilty about shopping thinking that I was spending too much, or guilty about getting an extra little treat here and there. But now, we have our envelope and that is what we spend. Some times we do get treats, but they came from out envelope. We make it work and we haven’t starved yet 🙂

    Even my 3.5 year old daughter is getting into it. She has a ziploc baggy that she puts her “moneys” in that she gets for helping do her chores. Then she takes them with us shopping and can decide what she wants. Last week she really wanted nail polish so we counted out her “moneys” in her bag (the best a 3.5 year old can) and then she picked out a bottle that was in her price range. She felt really proud handing the cashier her bag of “moneys”!

    This cash thing has really changed our habits and we love it! And we are seeing our savings account rise each month because we are sticking to our budget.

  • We started using cash this year and it has been amazing. We save so much money. At least half with all the couponing and store match-up. I am going to start blogging about freezer cooking. I am not a good cook so we will see how it goes. 🙂

  • holly christine says:

    i thought the cash system was a great idea until i lost my wallet (with $90 of our grocery cash). you can cancel a credit card, but that cash is gone forever. i know it sounds irresponsible to lose my wallet, but i think we all know how things like that happen when you have a screaming baby and you can’t think.

    • Kellie says:

      @holly christine,

      Holly,

      That happened to me a few years ago…crying, restless baby led to a very distracted mommy and my wallet being left at the checkout. Now I’m shopping with 3 little ones, and while I haven’t left my wallet again, I have left a bag of groceries!

  • Heather says:

    I am so excited to try this. I am very good at sticking to the budget but if my husband happens to shop with me then it goes out the door because he finds such great deals ( he is still learning and at least he is willing to). I think having just the amount I need to spend will help alot. I was suprised to hear my cashier say today “Look here comes the coupon lady”. I can’t believe through reading your site how much I save now here’s to saving even more. Thanks.

  • I have mixed feelings. I”m one of those EXTREMELY responsible credit card holders and my weekly average in 2010 for groceries (DH, 3yo DD and I’m pregnant, and we have 2 cats)– is $29.

    One of my concerns is simply carrying around the cash. With a credit card, you have protection if it is lost or stolen and used illegally. Sadly, some of the areas where I shop are also frequented by pickpockets and other criminals, and carrying around an envelope with cash might not be the best idea. Once it’s gone, it’s GONE. And untraceable.

  • Jeanette says:

    I was very skeptical of the cash only system, until I tried it. I always have a budget, but always have trouble sticking to it. I can’t believe how much simpler using cash is! I don’t have to think about it. If there’s no cash, no groceries. It also has helped me plan my shopping trips better, and I’m definitely going to the stores less often. I’ll never go back to my debit card for groceries.

    And I never bring a calculator to the store, I always just use the calculator feature of my cell phone! One less thing to carry and remember!

  • Lisa B. says:

    I totally agree with you. I know that when I shop with cash only – I spend far less. Since hubby & I are “Dave fans” – I usually go with cash – but not always. I think I’ll go make hubby’s night & tell him I’m committed to doing this for the next 3 months. 😉 He’ll be so happy! LOL

  • Kathy says:

    Our family started couponing about a year ago. Then about 6 months ago we started using a Visa gift card for groceries only each month. This was very helpful but still cost us about $4 a month to buy. This January we started the envelope system and I love it. It really does help me to use cash. It is more real to me than when I used to just swipe a card. We pull out our grocery budget from the bank each month and keep it in an envelope. Then I take out of the envelope only the amount for that week to take with me to the grocery store. We are trying to get out of debt this year and this has been so helpful for us. This is a keeper for our family! Thanks Crystal for your influence on our family!

  • Kelly Hess says:

    Yep – I am one of those people that are the “rare responsible” credit card users. I stick to my list and my $65 grocery budget every week!! Somestimes I spend less others more but I never go over the $65 average for the month. I never want to pass up a great deal just because you didn’t bring enough money! Plus you earn so many perks with credit cards, last week we had a $50 dinner at Red Lobster courtesy of Discover Card!

    • Lynn says:

      @Kelly Hess, I’m a rarity right there with you!

      • Emily says:

        @Lynn, Me too! I “break the budget” regularly when I see an outrageous deal that I simply must stock up on. In our home, we shop to keep our pantry stocked, not for weekly meals. Does that make sense? I stockpile each week on loss leaders and fill our pantry with what I believe is the absolute lowest price on items. Then when I meal plan, I start at my pantry.

        When I tried using cash only, I got frustrated about not having enough cash when I saw super-duper deals that I couldn’t take advantage of.

  • Amanda says:

    I used to believe that I was so responsible with my debit card! I converted to cash only about six weeks ago. WOW! I was not as responsible with my debit card as I had led myself to believe. I feel like we have really plugged up some holes in our budget, which is leading us to more and more financial peace.

  • Johnlyn says:

    Instead of using a calculator, I keep a running total of what I’ve spent on my grocery list.

    Also, on my grocery list, prior to going to the store, I write down the price of everything I plan to buy. I have to estimate some things, but I’m usually pretty close now.

    I was one of the “but I’m good with a credit card, we get rewards and we pay it off every month” people.

    I KNOW for a fact that I spend way LESS than I used to for groceries. I will never ever ever go back to using anything other than cash!!!

  • Jennifer says:

    Just today I experienced this. I only had $20 to spend at the grocery. There were other things on my list and if I had been using debit or credit I would have just gotten them. But I was determined to make the cash I had work. So I stopped when I hit my limit. It felt good not overspending.

  • Amanda says:

    We love using mint.com budgeting system because all our debit or credit purchases automatically show up, so we can account for every penny…plus mint is FREE!!! 🙂

  • Heather says:

    We use a credit card (pay off in full, etc), and keep a detailed budget. Like others here, we are responsible and also earn hundreds in gift cards every year, which is our main incentive for doing so.

    However, I do think Crystal is right for about 99.5% of the population. Even though I consider myself disciplined and frugal, I know that I could most likely lower my budget a bit more if I went to cash. (Remember, her series is to help you LOWER your budget, not to keep it the same.) But I am happy with my current budget, and have several reasons for continuing to use my card, so I am not planning on switching to cash-only. But I will certainly keep the idea in mind, should our circumstances/financial goals change, and require a tighter budget.

  • Jess says:

    I really, really, really want to get on the cash envelope system, but I am currently unemployed and the funds from unemployment all go towards paying bills (rent, utilities, insurance). I have been putting grocery money on my credit card (waahh!) for 6 months now while I have been looking for a job. I can’t wait to do an envelope budget once I have extra income from a job.

  • 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:

      @Sarah,
      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!

    :0)
    Lisa
    http://www.warriormama.com

  • 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:

      @Mandy,
      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.
    Interesting…..

  • 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:

      @Erin,
      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:

          @Erin,
          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!

  • Crystal Brothers says:

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

  • Shelly says:

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

  • maura says:

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

  • Nicole says:

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

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