Back when I was looking over our budget for April, and reflecting on how March had been, I decided to do a cash only challenge for April. Only for specific categories within our budget and using a set amount for the month. This was to try and get my spending back on track; the elusive NSDs that I was failing to get, plus an overall feeling of just being slightly out of control meant I needed to do something fast.
So, the categories and amounts I decided on were:
- food – £250
- petrol – £150 – we’re away and will use the car more than normal
- child related costs – £100 – this includes formula/nappies/wipes/clothes
- household items – £50 – this includes household items/the cats/
And you know what, I was excited! Excited to start, to feel more in control and positive about spending. After all, wouldn’t spending in cash mean that it would be harder to spend?
But, I’ll be honest, I failed this challenge.
Firstly, I didn’t want to get all of that cash out in one go and have it sat in our house or in my purse with me. That’s a lot of money just to have! So, I decided quite quickly that I would split the amounts into weekly numbers, to make it easier in terms of amount of cash on my person. I normally don’t have any.
Then, the faff of having to go each week and get out random amounts to fill my envelopes wasn’t great. Naturally, I am not someone to carry a lot of money in their purse, so I rarely go to the cashpoint to get money out. I would much rather spend on my card and the convenience of that is why I like it.
Also, about a week in came to quandary about buying something online. Do I buy it anyway or do I wait until May to purchase something as it wouldn’t be in cash? In the end, we did purchase a few things online during April, obviously using a card.
Would I try this again? Honestly, I don’t know.
I get that using cash only can be really helpful to a budget. Especially if you’re new to budgeting and need to try and stick fairly rigidly to something. Handing over physical cash does make spending a lot more real. It’s so easy just to swipe a card without really thinking about it.
I also appreciate that having leftover cash at the end of the month can boost your savings, if you’re disciplined enough to put it into savings and not just blow it on something at the end of the challenge. If I had a bit left at the end of the challenge, I would be very tempted to get a takeaway, I’m not going to lie!
So, slightly disappointed in myself for not completing the challenge as I wanted to. But, it was eye-opening for me as I realised that using cash only isn’t something that is practical or helpful for me.
Do you use cash? What do you find helpful about it?
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To use cash only for a whole month you do need to be extremely disciplined. Kudos to you for trying it. I know I would fail, for many of the reasons you mention.
I am trying to do a money focus month but not gone down the cash only route as I would fail for sure! Am trying to me more conscious about my spending. If I haven’t put it on my list then I cannot really need it. Still hard!
The main thing is you have learnt what doesn’t work for you.
I don’t think cash would work for me either! I pressed the wrong button on the cashpoint the other week and got £150 instead of £20 (HOW?) And I didn’t like carrying that much money either. I find card payments are easier to keep track of because they show up on my bank statement online and I can check I’ve added everything to my budget app.
Well done for giving it a try, it’s still a valuable learning experience.
Tx
I’d not see this as a failure, quite the opposite in fact … it proved how careful budgeting (and sticking to it!) plus use of cards can trump cash every time.
Not only do cards give access to better pricing online, but can also be used to give short term leverage, buyer protection, and of course free money on every purchase in the way of cashback.
The reality is a few hundred a year in cashback isn’t going to get you to FIRE anytime soon, but it’s still money that I’d rather was in my pocket than the retailers ☺️
I used to use cash but now prefer to pay by card for the cashback and use a spending app tracker to keep on top of what we are spending. Also as both DH and I are early retirees we both have fuel costs with 2 cars and both do food shopping rather than just me so we do joint credit card for food and fuel and repay in full each month. I do use cash from my personal account though as that is a budget where when it is gone I stop spending!!
I know cash is king, and some people rely on cash budgeting, but I don’t think it is for me. Sometimes I like to take our grocery budget out in cash because I see the visual savings when I spend less, but it is too tempting to spend it on rubbish.