First week on a cash-only grocery plan

[limabean]

DH and I decided to only use cash for groceries and incidentals for a month and see how much we save, since we'll have to be conscious of our spending instead of just swiping the debit card all willy-nilly. I'm excited! I went grocery shopping yesterday (with $80 cash), and got enough for the whole week with $13 left over. I might need to go back for a little extra produce and milk in a few days, so that $13 should be enough to cover that. We've been spending upwards of $700/month at the grocery store (I know!!!!!), so this should make a giant difference. 

The only thing is, toiletries and paper goods were included in that grocery bill before, and obviously those things can add up to quite a bit. So I'm buying those things separately on my debit card this month and saving all the receipts, then at the end of the month I'll tally up the total monthly spending on that and add it to the cash-grocery budget. So it might end up being more like $100/week for food and non-food combined, but that's still way better than we were doing! 

Oh, and for incidentals DH and I each get $20 at the beginning of the week to spend on coffee or whatever throughout the week, and once it's gone, it's gone. 

So does anyone use a cash-only system for stuff like this? Have you found that it makes a big difference in how conscious you are about spending and how much you're able to save? 

[zebra15]

I did cash only for awhile and that process didnt work for me. I have an online bank and getting cash is a royal pain.
What I ended up doing was keeping track of my reciepts for a couple months and developed a good grocery budget from there

[JulianneW]

Great job!

I totally know what you mean about swiping the debit card. We don't use a cash system exactly but my husband and I have started using an envelope system. I wasn't to excited about having to use a cash envelope system so we started mvelopes. For me it is like using cash because I only have so much in my grocery envelope and both my husband and I can check it from our phones. It made me realize we were spending insane amounts of money on groceries every month. It really keeps me in check. I now buy whats on sale or the cheaper brand and I don't buy everything I want (treats) because I know this money has to last. 

[MaryElizabeth]

I've been considering this system too... My husband likes to get cash out and then use that for the week. My problem is, is that I put everything on a cash back credit card that I pay back each month. I like getting the little checks in the mail with free money :) I guess I will have to be more strict about what I am spending, bc before you know it....I've spent my whole month's budget! I also heard that you can keep a little paper with your credit/debit card and write down the totals of what youve spent so that you can SEE how much youve spent instead of it being a clean swipe and sign with no accountibility. I think I will try that....

[its_betty]

We use cash exactly as the OP does. A weekly amount for groceries (which includes most household items and non-extravagant eating out). $20 for each adult cash for discretionary spending. It's made a huge difference in our spending habits. When we first started the "allowances" dh complained that he would never survive. Now he hardly spends it at all. He went to see bands two nights last week on the spur of the moment and was able to pay out of his saved-up spending money, with plenty left over.

Since we do use a credit card for some items and places, we've added one more envelope: the "put in bank" envelope. If we shop Costco or go out to eat and use our credit card, when we get home we move the cash from the grocery envelope to the "put in bank" envelope. That way we still keep to the cash budget. (We use a Costco AmEx card, paid off each month. It more than pays for itself--and the Costco membership--in cash back at the end of the year.)

[jimblejamble]

We just started this. It works a lot better for me than just "trying" to keep it under X amount because with the debit card I can say "Well it's only another $1.50..." and soon I'm $10 over my budget. Taking cash, I CAN'T spend over my set amount!

[NewBeginnings1]

Consider adding TP and all non-food products to a separate budget named " Household Goods" or something. 

If you're going cash only, try it for these expenses. Grocery, Household Goods, Entertainment.

I really recommend going cash only for Christmas as well. The past two Christmases have been stress free because I knew we weren't overspending! Also makes returns very easy!

The biggest problem I had was that I didn't make going to the bank and withdrawing the money. If you can stay on top of that, you shouldn't have a problem.

Edited by NewBeginnings1 - 3/7/11 at 8:58pm

[limabean]

Thanks for the tips, NewBeginnings! 

We're doing great so far. I had to get more milk and fruit, but I still have $5 left until Sunday, and we shouldn't need anything before then. We actually still have stuff for 6 dinners (DS and I weren't feeling well this week, so we had stuff like soup a couple nights instead of our planned dinners), so I shouldn't need to buy as much stuff next week. It's funny though, now when I run out of something expensive like olive oil I'm like, "Oh shoot! That's going to bust the budget next week!" whereas before I wouldn't think a thing of it. I really like being so conscious of where my money is going and how wasteful I was before. 

So, those of you who use this system, if you have money left over at the end of the week, do you take out less money the next week, or do you put it in savings, or blow it on something frivolous, or what? Like, if I still have this $5 at the end of the week, should I put it in a vacation fund, or only take out $75 instead of $80 next week so that I have $80 total again, or leave it in the grocery fund for weeks when I do need something like olive oil, or what? 

[VisionaryMom]

We tried a cash-only system, and it didn't work for us. I slip out the grocery store a lot at night and just grab my debit card. I would inevitably forget the cash, & it just never worked. I would like to go to cash for spending money for coffee & things like that, but I don't ever actually go to the bank to get the money out.

[mumkimum]

Cash-only for groceries has been a huge help for our budget - we take $80 every 2 weeks, and $80 a month for costco.  About half of household incidentals get covered through groceries, the rest by our spending money (which seems fair - we've never found a good way to keep it under control otherwise and it seems to work ok this way).  I've come to know what meals are the cheapest to make, so I can balance the grocery shopping out well that way (esp when we need to stock up on oil or butter or something else) and have always been pretty decent at remembering what we've got that needs using up to avoid wasting money.

I've fallen away from planning meals too far ahead, and have come to do smaller more frequent shopping trips (planning 1-2 meals and buying for those instead of for the week).  Partly it's cause I hate using up all our cash at once, but it's also ended up being better for making sure we actually use things up. 

I tend to float any extra money leftover toward the next week, or sometimes use it to treat us to pizza or something (if it's really significant).

[Tilia]

That sounds great!  I have thought about buying a gift card to the grocery store to make sure I don't go over.  I am really bad with cash though, better with debit.  Then I can see which store the money went to.

[Logan]

We have started doing this too as I'm not an organized shopper- I shop when we need something, so it could be a $14 shop or a $150 shop. So I found I would just buy using the credit card spending who knows how much, because you can't not buy food, right? And it would just add up so fast! I also find that most of the places you can eat out for lunch here require cash and before I always transferred everything straight to the credit card so couldn't get cash out ever without getting charged for it. Food is a lot more expensive where I am in Australia it seems- no way could I feed my family for $80 a week- unless we only ate rice and nothing else, even that is $5-6 a pack. So I am budgeting $200 a week for food- even though we usually spend at least $300 a week. But I'm trying to be more frugal about what I buy so we have no wastage and more budget-conscious meals. I only started last week so not sure how its going so far. But I definitely saved a lot more than I usually do and was also more conscious of the little wastes of money- things you don't notice when you just put them on the card. But when you can physically see the cash disappearing its a lot more real  

Also this is our money for all other fun stuff and everything basically at the moment. Except for electricity and phone/internet (our only other expenses apart from food) as they come directly from the card. But we are saving VERY hard at the moment for something important so we are not buying anything non-essential for a while. Also our weekly 'food' budget includes all other grocery type items too, everything from batteries to vitamins and anything else you can think of. But we don't buy a lot of those types of things so they just mingle in with the cost of food each week. We're not big on toiletries-type products and beauty items- even the 'organic' ones are full of harsh chemical/substances that I dont think should be on the skin most of the time. So we probably save a lot in that area too. 

[BetsyS]

We went to cash, and it's been very helpful for me.  My initial budget was 75, then $80 a week.  I've just increased it to $100/week, as I was having trouble, and it felt like we never had enough food. 

But, the cash certainly keeps you accountable.  :)

I actually do 2 weeks at a time.  I do a big, multiple store shop on payday, using over half the money.  Then, the next week, I just buy milk, bread, and produce.  This seems to work best for us.