I Tried An All-Cash Diet For 60 Days, And Here’s What I Learned


For the last two months, I’ve been using cash to pay for the majority of my purchases. And yes, even the Trader Joe’s cashiers have laughed at my dedication to dolla dolla bills. But I think I’ll have the last laugh because, for first time in my life, I’m saving, avoiding dipping into my savings account, and hitting financial goals left and right, all thanks to my new cash-only diet.

I’m not exactly sure when inspiration hit, but I think I can approximately pinpoint it to when I was taking yet another depressing look at my school loans. They aren’t out of control, but it’s still overwhelming when you calculate how long it will take to pay them off at your current rate. After watching about a thousand Dave Ramsey-inspired YouTube videos and reading even more TFD articles, I made my decision: I was going to create a zero-based budget every two weeks in accordance with my paycheck, and the majority of my spending would now be in cash. (A zero-based budget, as defined by Investopedia, is “a method of budgeting in which all expenses must be justified for each new period.” It starts from a “zero-base” and each expense is analyzed for its needs and costs.)

It’s been an experimental and insanely productive two months. I paid off the smallest of student loan balances (don’t worry, I still have two huge ones left), hit $1,000 in my savings account (emergency fund, here I come!), and I have never been less reliant credit cards. Although my system may not work for everyone because cash can be super inconvenient, I still feel like I’ve learned some valuable lessons that can help anyone starting out on their wobbly budgeting legs. Here’s what happened during the first two months of my all-cash diet:

1. I finally had my “oh, that’s where my money is going” realization.

The first thing I did after deciding to take control of my finances was print out my checking account statements. After printing them out, the highlighting began. I picked out categories: food, entertainment, personal/household items etc. Let me tell you, this was a major eye-opener. I was more shocked by the frequency at which I spent, than the amounts I was spending. Whole Foods and CVS were major offenders. Working right down the street from a Whole Foods, and routinely taking therapeutic strolls around CVS were sucking up a lot of my cash, and I’d simply had no idea — and nothing to show for it. It was a life-changer to see these habits staring back at me.

2. I realized that, if I budget wisely, I can afford more than I thought.

Over the last couple of years, I have been battling a moderate case of adult acne. It’s been a major hit to my self-confidence, but I began seeking treatment a year ago, and it’s now mostly under control. Part of my treatment plan involves seeing a homeopathic doctor (not covered by health insurance) and going for a deep-cleansing facial once a month. These two things aren’t cheap. The doctor’s appointments and facials each cost me about $150-$175. Before I moved to my all-cash system, I just swiped my credit card to pay for these treatments and paid off my credit card later. After creating my budget, I was shocked to learn that I could actually afford to pay cash for these things up-front, as long as I saved the money for it. There is something about things costing more than $100 that made me think, “WHOA, can’t afford that!” But, in reality, the money is there, and I just have to set it aside when I get my paycheck.

3. My bank became my best friend.

Every payday, I walk into my bank and withdraw the cash I need to cover all my expenses for the next two weeks, including my saving goals. Yes, I actually interact with real humans at the bank rather than just pushing some buttons at an ATM. I do this because I need specific denominations, but the experience of walking into the bank every two weeks also helps me financially. It’s personalized the whole processes — I feel a certain accountability now that I know the tellers at the bank. And it encourages me to ask questions I’ve been putting off: I was able to switch to a credit card with no interest for a year, and a much lower interest rate than the card I was using. I would not have known about this card if I weren’t regularly going to the bank. Also, free Jolly Ranchers are a major plus!

4. I started figuring out my financial priorities.

By far the toughest part of moving to my cash-only system was saying “no” to things. I would be nothing without my friends, but having friends ain’t cheap. There are drinks, brunches, and uber rides after the drinks and the brunches. Socializing is a priority for me, so I do set money aside for this, but saving money is my top priority. Being honest with yourself about how much you want to spend per week on activities is the first step; this helped me set an honest budget that doesn’t make me feel like I am depriving myself. It’s okay to be honest with your friends. You can gently say “no” and cite saving money as the reason. We’re all adults here.

5. I started keeping a to-do list for purchases.

Keeping a running list on my phone of things I need or want to buy has really helped me stick to my budget. I find that using cash requires planning ahead of time, so I don’t run myself out of cash. Maintaining my list forces me to know what beauty products, cleaning products, or even clothing items I need to replace. Being able to refer to my list means I can set a budget for the week that will allow me to make the necessary purchases.

6. I still put money aside to treat myself.

Saving up for fun things is the best! If you attempt this challenge, I think it’s totally okay to make a cash category for a new purse or a trip to the record store. Maybe it’s just me, but I’ve gotten such a thrill using cash for the fun things. I used to throw a lot of these purchases on my credit card, but paying cash instead has added more value to these expenses. Saving up in cash also means waiting until you can afford the purchase up-front, which is a great exercise in self-discipline.

7. I realized some of my past mistakes, and started to remedy them.

This is horrible, but my previous approach to credit cards was “Oh, this is Monopoly money.” I am weaning myself off of this view. And though, fortunately, I’ve never had any crazy amount of credit card debt even with this view, there have still been more than a few times I’ve swiped because YOLO: the hangover-deserved pad thai, a spontaneous trip to the restaurant that never has open reservations, etc. I’m not ashamed of these mistakes, but I’m glad that I’m improving my budget and that I’m in control of my finances for the first time in a long time. My all-cash diet is still going strong, my savings is growing, and I’m still learning from this whole experience.

Janessa Jackson is yet another 20-something that spends too much time watching Netflix. She is currently binging The X Files. You can find her sometimes funny tweets here.

Image via Flickr

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  • Michelle

    I do this through mint, i’ll even deposit money from Venmo (the common denomination among my roomie and friends) so that I can tag it easily in each budget category I have. But oh #5! My list is depressing because I want all the things, but don’t necessarily need them.

    BTW, great job keeping that cash budget, it’s a great tool to use to get started budgeting (or those judge’y mint updates).

  • GemNoelle

    Interesting. I recently moved to cash only for all food purchases (groceries and eating out). This has helped me not to over spend in this category. Every other week I take out my food cash for the next weeks. Knowing I have limited cash has made me much more cost conscious at the grocery store – I buy things on sale, limit my fancy extras budget, and have gotten serious about menu planning. Since switching to cash I spend about $20 less/ week at the grocery store.

  • Love it! Zero based budgeting is the only thing that’s worked for me because of how it makes me prioritize my goals & my spending. I use YNAB for this, but cash principles are the same! It’s all a matter of finding what works for you & sticking to it. Good job!

    • Janessa

      Totally agree that zero-based budgeting helps you prioritize! Being able to funnel my money in a specific direction helps me reach my goals and it makes my budget feel more flexible. Good luck with yours!

  • Heather

    This is very helpful! I’m going to try it

    • Janessa

      You can do it! It’s a great way to find out what does and does not work for you budgeting wise.

  • Amy

    I started doing a cash-only budget last year in order to pay off my student loans and car loan. It’s really amazing the effect using only cash has on your spending habits. I have since paid off my debt (in a lot less time than I thought it would take), and like the author, I have made major strides towards my financial goals. Now, I am spending a little more on my credit card for convenience, but I still make a zero based budget every month so every dollar on there is accounted for, and the card is paid off in full at the end of each month. If I was going to give someone just starting this system a piece of advice, think about what you think you need in the category of things like food and entertainment and up those amounts a little when making your first budget. Those were the categories that I was too strict with at first, and I was frustrated the first month or two of trying this out. Eventually, I found the groove for my lifestyle though!

  • Jillian Taylor

    Using cash has the exact OPPOSITE effect on me. I track my expenses better by purchasing solely via cards so my bank statements show exactly when and where every bit of money goes.

    When I withdraw cash and stick it in my wallet, I look at it later like OH LOOK FREE MONEY because it’s already been withdrawn, so the record of spending is already on my bank statement, so now I can spend it on whatever and there will be NO EVIDENCE.

  • Lask Nimrod

    Well, you can easily save more by cutting out the homeopathic “doctor”…

  • Shamira West

    This is interesting! I feel like if I had cash I would spend it faster than I would if it was in my bank account.

  • I’ve been relying mainly on cash for about 50 years. I don’t think doing so has caused me to spend less, but it sure makes it tough for marketers and the NSA to track my spending! 🙂

  • David Neal

    You now understand the most important thing, how much you spend and on what. That is the lesson of this exercise. But you now should quickly go to cash back cards. Giving you 1-3% cash back, it will add up over time. Of course you should always pay off the balance each month. As you know, the financial industry makes a fortune on a 1-3% rakeoff. They have the yachts. You should be on that side, not on the side of those paying for it. Over decades this adds up. Probably thousands of $ at 3% cash back on groceries vs. paying cash for years. Also, it is much easier to keep track of spending on cards, they all have online reports that can be downloaded to quicken or mint (i prefer quicken as mint makes you put your passwords online essentially) also, if you lose cash or it is stolen, it is gone. credit! cards have a limit of $50 and only if you don’t report quickly enough. Best luck with your finances!

  • Doreen Henry

    I found this show rather amusing. The “Cash Diet” theory is good. Our family uses only cash for food, gas, restaurants, and everyday items. I wish we lived in an area with better public transportation and safer roads to walk on. I shop at grocery liquidator stores. I often get 3-4 bags of groceries for less than $20. Spring and summer bring farmer market fresh food. If I go late in the day, the stands give great prices so that they won’t have to haul items home again. Once again $10-15 on good wholesome food. I make mostly homemade meals. I know she cannot grow things, but gardening saves us enormous money. I start most of my own plants from seed. I buy clothing at GoodwiIl, Salvation Army, and flea markets. I make my own cleaning products. I refuse to pay $10 dollars for Tide, $3 for window cleaner, $4 for bathroom cleaner. In good weather I hang out my wash to dry, in winter I hang heavy items to dry in the basement. I also make my own bread for pennies. I make by own ice tea, kefir, lemonade or break down 1/2 gallon beverages into reusable drinking bottles, once again for pennies. We pack lunches ($1-2 per lunch) which include a small homemade hot meal, salad, fruit, and desert. Hubby gets free coffee where he works. I make my own soap (10-25 cents a bar) which is as moisturizing as Dove. I’m having trouble with dishwasher detergent. I bet she has a cell phone. We don’t. Saves us big bucks. We buy a disposable phone when we travel long distances. I don’t need to tell everyone where I’m at and what I’m doing and I enjoy talking to my dinner partner rather than texting. We don’t go to movies, rather buy the DVD when it goes on sale. I read a lot, however buy my books at flea markets, big library sellouts, Goodwill, Salvation Army, and Amazon (when I want something specific) and also read free online books. AND yet I have friends who economize better than I do. TAKE NOTE: We go on a fishing trip to Canada and 2 Florida trips once a year and spend on whatever we want.