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  • The All Cash Spending Experiment is over (yes, already)

    Well, that was short-lived. We didn’t even make it through the first weekend before throwing up our arms and giving up on the All Cash Spending Experiment. The big reason the experiment failed, as my husband put it, is because spending only cash saves money by making you miserable. His sentiment actually reminded me of a comment left by Living Almost Large, who said that she was unhappy spending only cash because she was such a tightwad, spent nothing and ate the cheapest meals possible.

    For us, the biggest problem wasn’t that we were too cheap to spend money. The problem was that there was too much effort required to spend money at all. We almost always have one or more of the kids with us, which it makes it darn near impossible to count bills. Which meant that we quickly accumulated wads of one dollar bills and handfuls of change. Okay, maybe that’s a bit of an exaggeration, but only a bit. We both carry small wallets and found it difficult to pull out the appropriate bills in a timely fashion. And it was impossible to stuff all of the bills into my wallet. Plus we both hate carrying change in our pockets.

    Another difficulty was that because I had a one-year-old with me when I went grocery shopping, I completely forgot to total up the cost of the items as I added them to my cart. I had a ballpark figure in my head based on what was on my list and how full my cart was, and I actually came within $2 of the amount. But the All Cash Spending Experiment didn’t factor into my shopping at all, and just made paying for the groceries more complicated and stressful.

    It won’t be a factor since we’ve ended the experiment already, but one problem that arose initially is that we didn’t have enough cash in our checking account to last the month. Because we pay for almost everything with a credit card and then pay the credit card balance off in full each billing cycle, we essentially get a no-interest loan from the credit card company each month. Therefore, our monthly budget is set up to pay the credit card bill and other monthly bills, and to transfer a set amount into savings each month. Well, as of February 1, we had only a fraction of the amount in our checking account that I expected us to spend for the month. I have some “extra” checks coming in later this month that I would have used to cover at least part of the difference, and I could have dipped into savings if we’d needed it. But I just thought I’d point this problem out in case anyone who’s in a similar situation decides to try the All Cash Spending Experiment for him or herself.

    I’m still happy we tried the experiment, even if it was a total failure. I would have always wondered “what if” if we hadn’t. And it helps a lot that I discovered in January that my resolution not to buy things just because they’re on sale paid off to the tune of approximately $500. That’s about how much less we spent on discretionary expenses than we normally do. It’s not all me, of course. It’s a team effort to diligently try not to spend money on impulse purchases. So we proved to ourselves that we don’t need an All Cash Spending Plan to save money.


    1. MetaMommy says:

      Because I do at least half of my grocery shopping at the farmers’ market, I do a forced cash only thing, too. Obviously, on a smaller scale. I fully agree with the difficulty of paying for things in cash with a toddler. It takes a lot of planning on my part, and I don’t even both with my wallet anymore. Another thing is that since I don’t like carrying too much cash for safety reasons, I have to be conscious of whether or not I have enough cash for food. Preferably, small bills 🙂

    2. instead carrying money i find carrying the plastic more pratical. a monthly budget and following it helps me limit my spending.

    3. Very Herodotus says:

      Whatever it is – it’s more difficult to do with a toddler!

    4. Clean ClutterFree Simple says:

      Using all cash can be a good tool to get a handle on out of control impulse spending–if you don’t have the cash, you can’t buy. But, I agree, it can be impractical, especially with kids. I can’t easily pay cash for gas if I have the kids with me, because I’d have to drag them out of the car into the office to pay. And that means running the candy gauntlet! Easier to use the card, and in that case, saves more money!!

    5. Living Almost Large says:

      Um, I only did two cash categories groceries and eating out. So I did not try to do it all.

      I had enough cash to pull it out and am trying again for February, where it will require buying more right? Since I was a cheapskate, but we’ll see.

    6. Chief Family Officer says:

      @Living almost Large – Sorry I misunderstood your previous comment! I am very impressed that you’re doing it at all (especially after my own disaster!). Good luck this month – don’t forget to eat well!

      @MetaMommy – I have a small wallet (actually, it’s a business card case) that I keep in my pocket. I’m like a guy these days, since I keep my wallet, cell and keys in my pockets. I carry a diaper bag if I think I’ll need it but all of my purses are buried in a closet somewhere.

      @b&i – Yup, I completely agree with you!

      @herodutus – You’re absolutely right!

      @CCFS – Yup, even before the start of the experiment I said gas would be paid for with a credit card because neither of us wanted to have to unstrap the kids from the car seats to pay. I don’t think Alex knows what candy is yet, but I dread the day that that changes!

    7. (found your blog from Like Merchant Ships and couldn’t resist commenting on this). My husband and I were just discussing this the other day. We are on a spending freeze (we do NOT use the word “budget” because we find our expenditures too hard to predict and categorize, but we are both pretty frugal so our spending freeze works). For us, it’s easier to keep tabs on credit card spending because the bills come and we review them together – and we pay both cards off each month AND they’re rewards cards which we use strategically. We do have to use cash at the farmer’s market which is where I do most of the grocery shopping and I’ve started trying to tally up the purchases, but with a toddler in tow, yup, it’s pretty hard!
      I guess my main point is that so many people have touted the cash-only system for budgeting, but I think cash is becoming an anachronism in our society (like having to go inside the gas station if you want to pay with cash). Coming up, we need to use a taxi for traveling and they even take Visa! Wow.

    8. Chief Family Officer says:

      @Margo – What you described is what I normally do to, i.e., monitoring our credit card spending. It is SO much easier than using cash. Enjoy your travels!

    9. We had the same problem also when I tried this experiment… because we get paid only once a month and we use our credit card the exact same way…
      I leave just enough in our checking account to cover Aldi expenses and give each of us a small cash allowance… However, we also found we didn’t need to spend only cash to save money…
      thanks for the blog!

    10. I guess I don’t understand what is so hard about paying in cash, toddler in tow or not. I am really stuck on that point. Frankly, I think this is more a parenting issue than a financial one. If your children are fussing at the grocery store, you should stop whatever you are doing and deal with them, first. A lot of times we feel pressured to hurry up and pay because people are waiting in line behind us or whatever. My husband often fails to record checks in the register because he’s in a hurry to move along and let the next person ring up. It only takes a few seconds to hand over your cash, then receive your change and put it away. It may be that if you give yourself permission to finish the transaction at your own pace you will feel better about paying in cash. If you are too busy to put money in your wallet, something is wrong! LOL.

      As to cash spending in general, for years we did what you do. The problem is that you get no real-time feedback. You don’t know if you’ve overspent until the end of the month, when it’s too late to do anything about it. Quick, how much money is left in your grocery budget right now? How would you answer that question? When we switched from using credit to using cash or debit, we did take a hit initially from being one month “behind,” but I really feel it’s been worth it and we’ve probably saved thousands (in just six months) from keeping track of every penny–and yes, standing there like a little old lady putting my money away. 😉 Now my goal is to get one more month “ahead” so that we can spend the cash that we earned last month, this month. I think that’s going to be awesome, and then we’ll never again be in the situation you described, waiting on checks to arrive so that bills can get paid.

    11. That is interesting! Thanks for sharing your experience! I have been trying to get dh to try a cash spending experiment, but he has been resistant for many of the reasons you have listed. He also says if he has cash in his pocket, it goes “poof” and is gone, so the cash system probably isn’t for us.


    12. Totally agree with you.

      I find that the cash-only folks are generally pretty rabidly supportive of it. I personally think it’s one of those “if it works for you– great” things. For some, the exercise is necessary to figure out how to budget and live within it. For lots of us, it’s not.

      For our family, we use our Visa debit card. We keep receipts and stay in a budget week-to-week and month-to-month.

      Catherine, I’m not sure why it is necessary to know right this instant what is left in my grocery budget. For me, I know what I need to spend each week and I know if I go over it, I need to spend that amount less next week. To get an exact number, it would involve doing some very uncomplicated subtraction that would take about three minutes — less time than it takes me to figure out how to carry cash, store change, use a purse again… not to mention my parenting “issues”.

    13. I know that the method of “using the credit card & then paying it off in full each month” works great for some people, but only if one is very disciplined already. Debit cards “feel” like using plastic, but have a bit tighter leash. Writing a check, one step further. Cash only: survival mode. Paying with cash has a finite quality about it that any other method of payment does not possess. And if you are trying to get off the credit merry-go-round, it really may be your only way.

      I have to say that I’m with Catherine on this one. I haven’t seen the toddler days in a while, but yes, they sure were difficult! And I think she’s probably right when she addresses the feeling that many of us have, standing in a line, wondering if others are impatient with us for “holding things up”. I don’t even apologize for it. I, as a cash customer, am any less worthy? One can very nicely & politely step down the line just a bit to give the next customer their turn, & still take that extra several seconds to count the change & put it back into the purse or wallet, write down the check amount, whatever. Paying cash only is HARD, yes. But it puts you on the controlling side of the money, instead of the controlled. To be a month ahead is a beautiful thing.


    14. In our family there is a lot more accountability using the credit card. You have to revisit your purchase when you enter the receipt and then again when you reconcile the statements. With cash everything just disappears into an abyss for us. Plus if I have cash I consider it unaccounted for and will spend all I have on frivolous stuff. I stick the to cc because it helps me control my spending.

    15. Hey there — We started using mostly cash over a year ago, when our debit card number got stolen and our grocery money took a stroll around downtown Bangkok. We use credit cards when we travel and for very large purchases, but for groceries, etc., we just use cash. It is probably easier for me to handle since I don’t have kids in tow. It did take some time to “re-learn” the cash-carrying skills I had before debit cards became popular, but I am getting used to it again. It’s not so bad once you get used to it. In the end, though, do what works for you and your family. Every situation is different.

    16. We did the plastic version of budgeting for many years and found it was really easy to overspend, no matter how well we did our record-keeping. I now carry cash for food, fun, and clothing, which were the categories we overspent in the most. I have a toddler, but it don’t think paying in cash is so much of a bother with her. If she or the people behind me seem impatient, I put the change in my pocket and organize it in my purse later in the car. It helps that I look at what’s in my grocery envelope before I hit the store and have a rough idea of what denominations of bills are in there and that they’re in order. A little time spent before and after the check-out seems to make it go more smoothly. But, amen, paying for gas in cash is just silly!


    17. No Debt Plan says:

      We use the credit cards in the exact same way you do. Love that cash back!

    18. I really have to say that it isn’t a parenting issue not being able to pay with cash when you have a toddler in tow. My guy is extremely well behaved. It is more a matter of having enough hands to do it all.

      Maybe the days of toddlers are too far gone for some to remember how hard it can be to juggle a purse, change, toddler and a preschooler… even when they are perfect angels.

    19. Chief Family Officer says:

      Thanks for all the support and empathy! It’s so nice to know that others have had the same experience. I’m sure cash works wonders for some people, I just don’t think I’m one of them!

    20. SweetCultivator says:

      I don’t think that one system is better over all for everyone. The important thing is to find a system that “clicks” with one’s style and tendencies. If that system is cash in envelopes or a plastic debit/credit card and an active register, if it helps you stick to a cash flow plan and meet your goals, it is the right one. Personally I have tried both and am still looking for the right mesh. I’ll get it soon hopefully but in the meantime I am really learning how to curb the impulses and learning diligence in managing the cash flow because I can’t fall back on a system. That in itself is the big feat to accomplish here.With the online availability of account information for both credit accounts and banking accounts, managing the cash flow real time is easier. If you need a quick balance to make a decision and can’t get to a computer, you can now have the account info on a lot of accounts accessible from your cell phone or a nearby ATM for a balance check. Beware of the using the ATM’s too frequently as most will charge a fee. That really irks me eventhough I know it pays for my convenience of having access to the ATM machine.

    21. Hey, I don’t mean to criticize anyone’s parenting. I know that small children can be a handful, and they have a tendency to start crying or acting up at exactly the wrong time. I like what anonymous said. You are not any less of a customer. You should be able to expect people to wait a few seconds or even a whole minute (gasp) as you address your children’s needs, wherever you happen to be.

    22. Dividends4Life says:

      I could see where spending all cash could make life miserable. Thanks for sharing your experience.

      Best Wishes,

    23. Chief Family Officer says:

      @Catherine – For me, it’s not so much making other people wait as it is juggling a toddler in my arms, no matter how well-behaved, in order to get my wallet out, count bills, get change, stuff everything back into my pocket, including a receipt, and get out. If my child is behaving less than adorably, that just ups the ante in terms of difficulty, but it was already difficult for me to begin with!

      @SweetCultivator – Excellent point, this really isn’t a one size fits all situation. I wish you much luck in finding your ideal system!

    24. Anonymous says:

      Wow, I am amazed at some of the comments that some people have the audacity to state. When did preferring to spend less time in the check out line, using your card, and not using cash make you someone who is a bad parent???

      Perhaps “Catherine” would like to give blog land a video tutorial on appropriate parenting techniques while paying cash in the checkout stand so we can all “see” how an expert does it.