I mentioned to Marc that I was thinking about doing an all-cash experiment, and he said he would be okay with it, so that was the deciding factor for me. Neither of us is thrilled at the prospect of using an all-cash system, but we are both interested in seeing if it really does save us money. So, we’ve agreed that February will be the month of the All-Cash Spending Experiment.
I think it’s important to note that the purpose of the all-cash experiment isn’t to reduce our monthly expenses, per se. And I’m not going to drag myself and one or both kids to AT&T, Verizon, or LA DWP to pay my bills in person. Instead, I keep thinking about a point Meredith made, that the fear of not having enough money at the cash register will curtail impulse purchases. So that’s the purpose of this experiment: to see if going to an all-cash system curtails discretionary spending by 10% or more.
We’ll be following a couple of guidelines to help us stick with the experiment:
- When it comes to paying for gas, we’ll still use our credit card. It’s just not practical to pay with cash, since you have to pre-pay, yet you don’t know exactly how much you’ll need for a full tank. And there’s usually at least one kid in the car, which would mean we’d have to take him out of his car seat, take him inside, then strap him back in. I can’t think of anything that would derail the All-Cash Experiment faster than something that requires this much effort. So we’ll be paying for gas with a credit card.
- Bills will continue to get paid the way they normally do, whether by online banking or credit cards or checks. As I mentioned previously, I’m not going out of my way to pay bills with cash. I suppose there would be some psychological effect to walking into my mortgage lender’s office with my mortgage payment all in cash, but I’m just not at the point where that’s something I want to do. The one place that I could do it without any real extra effort is the boys’ daycare, since I have to go there anyway, but I don’t want to put off the director by showing up with that much cash.
- I also reserve the right to do some shopping online, which naturally requires a credit card. Or a debit card, I suppose, but I never use my debit card and I like the extra consumer protection I get from using a credit card. But I don’t expect any online shopping to have much effect on our end-of-month tally – I’ve been sticking to my second financial resolution for the year and haven’t been buying much.
So basically, most if not all of the cash we spend in February will be brick-and-mortar store and restaurant purchases. Places like Trader Joe’s and Target, Coffee Bean and Jamba Juice. I’m actually kind of excited to see the results. And of course, I’ll keep you updated once we enter the month of February and the experiment begins.