Mar 2, 2012

Setting The Rules for The Modified Cash Experiment

I'm experimenting by going all cash this month when it comes to my grocery and drugstore spending.

But on Day One, I ran into a wrinkle when I bought a Plum District voucher to Abe's Market and then spent it. I had to pay $19.19 on my American Express, and all I bought was groceries - Plush Puffs (which are the best marshmallows ever), some fair trade cocoa, and some lunchbox items for the boys. It seems like that money should come out of my grocery spending so I pulled $20 out of my cash envelope.

I also realized that I have a Vons gift card  - it doesn't make a lot of sense to spend cash when I have the gift card. But I think that's what I'm going to do anyway. If I get to the end of the month without any money left in my envelope, I can use the gift card to buy our milk and produce to make it to April 1. ;)

Also, I will keep using my credit card at Ralphs (our Kroger affiliate) to buy gift cards - as I've mentioned before, I like to maximize my credit card rewards to get discounts that I wouldn't otherwise get at stores like Target and Amazon. {As a side note, I do realize I'm giving up some credit card rewards by going all cash - but the purpose of this experiment is to save money, so hopefully I'll save more than I would have earned via rewards.}

I can't foresee any other issues that might come up, but it'll be interesting to see if there are any!


Susan said...

This is how I do it too. I use an all cash weekly system and when I purchase something online I pay it back in cash to my husband (who spends very little) so he can keep pocket money in his wallet. I've been doing this for about 2 years and it works well.

Chief Family Officer said...

It makes sense - I'm still not sure I want to do this for the long term, though. We'll see if I think the savings are worth it ^_^

Amber said...

I'm interested in seeing how this goes for you. I like Dave Ramsey, but this is one area that we do not follow as he suggests. I love the convenience and the rewards of credit cards and we have NEVER carried a balance. And I feel like we are so frugal that having to use cash wouldn't change our spending habits. In fact, I feel like cash just disappears and I can't track it like I can stuff I put on my card. Keep us updated as the month goes on!

Chief Family Officer said...

Amber, I've felt that way too, which is why this is an "experiment" and not a commitment, LOL! I'll keep you informed :D