How I’m Recovering From Trying & Failing At A Cash-Only Diet

Earlier this year, I set a goal to bulk up my nonexistent emergency fund by $4,000 before the end of August. I knew at the very least, I needed to designate $600 of my earnings each month to savings if I wanted to accomplish this feat. This was going to take serious discipline — and more importantly, a budget.

That’s when I decided to apply the cash-only diet to my spending. I began by immediately transferring $700 of my $1,800 paycheck to savings, and withdrew the remaining amount as cash to live off for the remainder of the month.

I designated individual envelopes with certain amounts of cash inside for each of my major spending categories. It looked something like this:

  • Rent/Utilities ($500 — full disclosure, I live with family, so I am fortunate to pay less than others)
  • Debt payments ($300)
  • Groceries/Food ($90)
  • Transportation ($40)
  • Hygiene ($60)
  • Entertainment ($50)

If I ran out of cash for one category, that would signal to me I couldn’t spend any more, or else I would have to physically dip into funds from another part of my budget.

Initially, I felt proud seeing the numbers in my savings jump from the lower triple digits to nearly $1,000. I never had this much money sitting pretty in my account before, and I became addicted to logging in to my bank app and staring at it. I was that much closer to my goal! Hell yes!

Unfortunately, that sweet feeling lasted only 18 days, during which time I had to dip into my hygiene fund to cover gas for a little extra driving I did that month for my job. This simple action caused a chain reaction that caught up to me one day while shopping for some much-needed lady products. I anxiously tried to add the cost of the items I wanted in my head, hoping the $22 I had left to spend for this category was enough. But my face wash, toothpaste, pain medicine, and feminine hygiene products totaled out to $27.50 at the register.

I stared at the conveyor belt, desperately trying to think of what product I could remove without seeming too embarrassed. I thought of cutting into my food budget, but then remembered that would mean not being able to buy the groceries I needed to make it to payday.

In a moment of weakness, I did exactly what I told myself not to do: I let my knight in shining armor — er, piece of shining plastic come to the rescue. As you can imagine, this was only the beginning of my downward spiral. That one instance of “cheating” on my cash diet soon became a regular occurrence, which resulted in using the savings I was supposed to be protecting to cover new credit card charges.

After two months, my progress was abysmal. Savings Account Balance: $460. I felt like a complete failure.

What struck me about my overwhelmingly negative feeling toward this challenge was how much it reminded me of my health-related struggles. Like many others, I’ve had my share of weight issues in the past, which I tried to remedy with every possible diet regimen you can imagine. Whether it was extreme low-calorie veganism, paleo, or sugar-free, they all had one thing in common with my attempt at the cash-only lifestyle: they involved some level of restriction that left me feeling more deprived than confident.

Whenever I under-budgeted for my needs, I used my credit card to cover the balance, and started overspending out of guilt. It was very much like saying, “Well, I guess I already screwed up my diet and ate three slices of pizza, I may as well give up and eat two slices of chocolate cake now, too.”

For these reasons, I’m calling my experience with the cash-only approach a financial crash diet. It’s a loaded term, yes, but at its very core, it follows the same mentality as the weight loss version. I aimed for quick results by making drastic changes I couldn’t keep up with, and as a result, it backfired. It reminded me of all the times I made 120 pounds my fitness goal — not because I would necessarily be any healthier, but because I wanted to see that number when I stepped on a scale. I now realize I was treating my money with the same empty approach.

I cared more about reaching my $4,000 goal than developing a personal strategy that would allow me to save money comfortably for the long term.

Now, I’m not saying the cash only diet is a bad thing, in the same way I don’t believe veganism or paleo diets are bad approaches to health. But taking this challenge taught me that just because a plan has positive intentions or numerous examples of success, it doesn’t mean that it’s guaranteed to work for every person.

Because of my failed cash diet, I’m giving myself three new rules to follow when saving:

1) It’s not just about cutting “bad” stuff out, but increasing the good stuff as well.

One of the main reasons I failed at achieving my goal via the cash diet was because I was taking a pretty lazy approach to saving by simply decreasing my budget, without considering how to increase my earnings. There’s a reason people say maintaining good health is a mixture of diet and exercise. Sure, you can lose weight and look amazing by cutting calories alone, but exercise is what aids our metabolism and makes our bodies stronger. The same is true for money — it’s a mix of spending less and earning more. You’ve got to build those financial muscles. In my case, I’m now adding tutoring as a side hustle to my income so that I can slowly increase what I can contribute to my savings each month.

2.) It’s important to have a buffer in your budget — not to be confused with a “cheat day”

I’m now adding a miscellaneous buffer of $100 to my checking account for when I’m a few dollars over budget in my flexible spending categories, such as transportation. I do not use this money to buy anything extra, in the same way I try not to erase an hour’s worth of exercise by celebrating with a post-workout IN-N-OUT burger. But I believe it’s important to give yourself room for unexpected spending — like a cab ride when the train is down, or if you don’t have time to cook and need a quick meal. It’s like a mini emergency fund, but it’s only for the month.

3.) Finally, it’s perfectly okay to take it slow. Sometimes that’s the better option.

When I was overweight and sedentary, I didn’t expect myself to run a six-minute mile on the first day of exercise…Given my pretty modest salary and high amount of debt, why should I expect to immediately be able to put aside an extra $600 every month? Although it would be nice to have over $4000 in my savings account immediately, I need to remain realistic and understand that good things, like solid abs, take time and patience to build. I now use the app Digit because it takes out a little bit of money every day, rather than a large chunk all at one time (Qapital is another awesome app to use). Because the amounts are so small, it doesn’t feel like I’m losing a massive portion of my income to saving, even though they add up quite a bit over time.

*****

Ultimately, there is no one-size-fits-all approach when it comes to personal finance or health. Sometimes the best thing to do is to try different strategies, and even see some failures before you find one that works.

As for me, one thing is certain: I now believe the best thing I can do for my money, just like my body, is to chase wellness, not numbers.

Savanna is a freelance writer in Northern California whose hobbies include all things theater and dog-related. She hopes for a world where avocados will be included in the price of her entrée and a 12-step program is widely available to people who obsessively collect air miles. Follow her on Twitter here.

Image via Pexels

  • eb

    This was like, really great and relatable and helpful and I appreciate you writing this. As someone who’s done the same in both health and money, I’m still working on finding that balance and figuring out how best to increase my savings and stop spending so much.

  • Summer

    Really enjoyed this! There are so many parallels to saving money and losing weight, it’s really hard to discuss one without comparing it to the other. You’re totally right in that a drastic change for either endeavor is not sustainable, but so many of us seek the instant gratification of a higher number in savings (or a lower number on the scale) that we convince ourselves we’ll surely keep at it as soon as we see a glimmer of progress. Inevitably, nope. I’m all for a headfirst leap to kickstart motivation sometimes, but it really needs to be deliberate and acknowledged as a way to get the ball rolling, not as an “I’m totally doing this until I reach my goal and it’s definitely going to work this time” sort of thing.

  • Anon

    Totally sympathize. I also set unreasonable expectations about money and am prone to just capitulating to a bad month. Also, toiletries always sneak up on me. I’m always surprised when it’s time to buy new shampoo and cleaning supplies but I totally shouldn’t be.

  • Shell

    My partner and I got back on the budgeting train after a few months of being “between jobs” and had a similar problem. Our first month was really tight and we under budgeted for a lot of our categories while trying to save a lot of money to replenish our emergency fund. Since then, we’ve made progress by assessing our spending of the previous month before writing the budget for the next month. We don’t make it a guilt thing or a blame thing, it’s just really looking at how much it costs to live our lives the way we want to.

    We still include saving in our budget each month and have a plan for our finances, but we give ourselves a little more to spend now. We would rather be comfortable with a game plan that takes a little longer to reach, than stressed and struggling to meet the demands of a budget that doesn’t fit our lifestyle.

    Now that our budget is a better fit, any extra income we make can go towards meeting those financial goals. An unexpected pet-sitting gig last month gave us enough money to make an extra payment on our car – one of the first debts we hope to pay off. If we were still using our old budget, we probably would have wasted most of it on “treating ourselves” instead of giving it a better purpose.

  • nicolacash

    Something that helps me curb impulse spending is buying all of my skincare/toiletries for the year upfront – like buying a giant bottle of shampoo, conditioner, body wash, all of the facial products I usually use, etc. It costs around $300-$400, but then I don’t have to go shopping for that stuff again until the next year and I’m not tempted to buy anything when I go to Target because my brain sees it as an off-limits thing.

  • #2 is so important. I used to budget to the last dollar and end up with an empty account by the next paycheck. It seems like you’re doing a good deed saving so much but when you feel sick the day before payday and have to charge $20 on your credit card to buy stuff from the pharmacy, is it really a good idea? I started floating $400 in my checking from month to month to cover these little things that can – and will – come up. I replenish as needed and it saves me a lot of headache. Thanks for sharing your experience!

  • Matt

    As someone who’s recently made a stronger effort to eat better, the parallels between food and money “diets” hit home! I use the envelope budgeting system (albeit with an app) and have found that EVERY MONTH I overspend in at least one category. Or an unplanned expense pops up. What’s great about using an app is that you have to record all your purchases, so you are tracking your spending. Overspending doesn’t signal failure, it just means you have to go back and re-evaluate. Over time, you start to see patterns and habits, and eventually settle into something that is sustainable.

    So I’ve applied the same approach to food – keeping a log of what I eat and when, and how I generally feel. If I have a misstep, I write it down. Sure, it’s not great, but it happened, and it happened for a reason. Figuring out the why is what’s important. Progress doesn’t come from doing nothing.

  • Vianna

    Not that $3 a month is THAT big a deal in the grand scheme of things, but FYI, Dobot is an app that functions almost exactly like Digit but without the monthly fee!