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My Cash-Only Experiment

Aug 14, 2015 by Ginger R.

Back to the Basics: My Cash-Only Experiment

Until recently I never carried cash and used my debit card religiously! Bag of ice for $1.04? Debit card. Pack of gum for $1.83? Debit card. And try as I might, I frequently forgot to record purchases. I often had an unpleasant surprise when I finally got around to checking my account online.

To get a better grip on my finances, I started doing some research on smart money practices. One of the recurring themes was to switch to a cash-only method. The theory behind only using cash was that you would “see” where your money was going and that the physical act of letting go of hard-earned paper bills would make you think twice about each purchase. According to, people who pay with cash have a tendency to save 10-20% more each month than those who don’t.

It sounded simple enough, and if it actually saved me money – well, sign me up! I started with a basic plan – I would pay all my bills using TTCU’s online bill pay and then use cash for my daily purchases (gas, groceries, entertainment, walking around money, etc). Figuring out how much to allot for my cash purchases was my first stumbling block. I had been using my debit card for so long, I honestly had no idea how much I spent on groceries, or eating out, or entertainment, or drinks with friends. Without thinking too much about it, I guesstimated $50 for groceries and $40 for walking around money. For two weeks.

Bagel BreakfastSo how was it, you might ask? I think the word I’m looking for is “horrendous.” My first inkling that things were going to be different was when I set out to run errands. My first thought was “Oh, I’ll just stop by the bagel shop and grab a quick breakfast.” Full disclosure – I realllly love bagels! My second thought was “Wait. If I stop at the bagel shop, that’ll cost me $6 and then I’ll only have $34 left.” So, a bowl of cereal it was! The next situation came a few days later when a girlfriend asked me to meet her for dinner. All of a sudden, I wasn’t comfortable dropping $15-$20 for a meal. The compromise? $1 tacos at a local place downtown. Tab for my dinner? $5, including tip! Not too shabby and we still had a great evening catching up.

Grocery shopping was another adventure. In my previous, debit-card-using life, if I saw something at the grocery store and wanted it, it went in the basket. I shopped without a list or a clear plan of what I actually needed. This time I came armed with a menu, shopping list, and $50 (I purposely only brought $50 to make sure I didn’t exceed my budget). As I made my way through the aisles, I thought about each item before it went in the buggy. Did I really need Cap’n Crunch at full price when Froot Loops were on sale and just as tasty? Why spend extra money on bagged lettuce when I could buy a head of lettuce for a fraction of the cost and chop it myself? All in all, I purchased two weeks of groceries for $49.67.

The experiment was not easy but it opened my eyes to my spending habits. It’s now been two months and after a little tweaking (increased my grocery budget and walking around money), I’m starting to see the benefits of using cash. I still miss the ease of swiping my card, but it’s nice to have cash on hand without having to stop at the ATM every few days. I’ve also found I don’t spend near as much as I used to and my savings is slowly growing. Using cash may not be for everyone, but if you’re just starting out or need to start over, you should definitely consider it.