Hey everyone! I challenged myself to ditch credit cards in favor of cash for the entire month of October.
If you’ve been following my blog for a long time, you know that I don’t normally carry cash. In fact, before this challenge began, I couldn’t tell you the last time I went to an ATM. I also don’t use a debit card for any purpose other than taking out cash. So most of my expenses typically go on credit cards, which I pay off every month to avoid interest payments.
While the rewards associated with those credit cards are great, it’s usually only 2% to 5% cash back, depending on the card I’m using. Would spending with cash, not plastic, help me reduce my spending? That’s the point of this exercise. I want to see the psychological effect.
I’m not going to bore you with every single thing I’ve bought this month. And I also want to be clear that I haven’t stopped using my credit cards completely. For instance, I paid $8 for Wi-Fi on a Southwest Airlines flight earlier this month. They don’t take cash. I used my card.
And there have been other times as well. From October 1 to October 16, I have used my credit card 16 times, according to my records. Purchases include Amazon.com, fitness classes, Uber, plus a few purchases at food and beverage establishments.
Speaking of that, the one spending category where I need to do the most work is food/dining. That’s really why I started this challenge. When I added up my cash expenses in that category alone, I spent $248 from October 1 to October 16. When the credit card purchases from that time frame are factored in, it’s $375.
That number seems very high, but I did start my month with a vacation. Looking back to September, my food/dining expenses came in at $680 for the entire month.
(This post was originally written 2 weeks into my challenge. After tallying the final numbers, I spent a total of $613 on food and dining, down from the month before. Most of my food and dining purchases were with cash.)
I’m not exactly sure if the cash-only diet has helped me. My overall expenses for the month of October were up compared to last month, but there were other factors at play — including a very expensive vet bill. That’s why it’s so hard to compare these things from just one month to another. Perhaps I need to extend this challenge for a few more months to see the impact.
How exactly did I keep track of this? First, Personal Capital. I use this app instead of Mint now, but both products are great for budgeting. And I started an email to myself that I used to track cash purchases. Whenever I bought something, I took out my smartphone and reply to the “October spending” email to myself with the purchase and purchase amount. This eliminated the need to keep all of the receipts.
Which do you prefer: cash, credit or debit?
Some of my recent Clark.com stories:
- The one and only reason to have a ‘piece of trash’ debit card
- Never start an email with this greeting