Adopt a Cash Only Lifestyle


We are on day 5 over here without power of any sort. School has been canceled, and we have spent some real quality time with our kids, without the aid of technology! Long walks, visits to the town library and our little village have filled our days. We also have been without 1 car (storm did something to’s dead) and the other car has remained parked with 1/2 a tank of gas in case of an absolute emergency. Again, I have had time to do some writing on this new blog, and most of the ideas I am sharing seem to link into this idea of operating without too much “extra” in order to realize other dreams you have.

For the past 14 months, I have not used a credit OR debit card and I’ve paid cash for everything 99% of the time (the other 1% has been at a gas station with no attendant present or a random online debit card purchase). This was a whole new world for me, since I used to be the guy who barely carried 5 bucks on me at any given moment! This cash system which I will describe is linked directly to the budget that you will be writing; some of your budget lines will be automated (mortgage, rent, insurance, etc.) and some will be “cash lines”. These budget lines, like food, gas, eating out, coffee, etc., are the categories where you can really start being frugal and responsible about. They are also ones that we traditionally don’t know how much money we spend on!

Studies have shown that when we spend cold hard cash on an item, pain centers go off in our brain; it is hard for us to let go of our money! These same pain centers do NOT go off when we swipe a piece of plastic. Magic money we don’t see doesn’t hurt! This is part of our behavior modification process I discussed in previous posts. By creating a cash and envelope system, we visually see that money is FINITE; there is an end to it if we are disciplined about not borrowing more.

Step 1: Choose Your Envelope System

This can be homemade or a little more fancy, it is up to you. Basically, you want to be able to label each envelope and be able to carry it around with you in lieu of a wallet. Personally, I love Dave Ramsey’s envelope system found here. For women, this is a really cool website: JennsWay. Ideally, the envelope system will hold your driver’s license and other important things.

Step 2: Designate Cash to Each Envelope with Categories

Categories are pretty much up to you, except for the following: Groceries, Eating Out, Gas, Clothes, Haircuts, Toiletries, Babysitting. If you go out to bars, create a “Beer” envelope (or stop going out that much…that will burn a hole in your bank account). Getting the money right for each category will take a couple of months of trial and error. DO NOT go for the gusto and severely underestimate. This will lead to a feeling of failure and frustration, something you do not need at the get-go. I will tell you that eating out and coffee were areas where I was spending too much money. I am also a huge reader, so I was buying around 10 books per month. When I designated an envelope for purchasing books, I looked for used books more often, and even used the library! Want to find hundreds of dollars each month? Budget wisely in the eating out category and STICK TO IT. Put a little of that cash in the grocery envelope and you will be so happy! I put $60 in the eating out envelope each month (yes, that is for my family!). Once in awhile, we PRE-PLAN an eating out excursion and budget that for the upcoming month. These don’t happen that often, since every time we go to a restaurant and walk out having spend $60-$70 for what we could have made at home, we are just plain old pissed off.


When you run out of cash in an envelope, you are done! You cannot go to an ATM and fill it back up. You actually have to be resourceful. No cash in the “eating out” envelope? Guess you are making lunch and brown bagging it! See that the “Gas” envelope is getting low? Adjust your driving habit. This is behavior modification at it’s finest, people. It works. All said and done, the craziest thing to watch is my bank account NOT MOVE each month since I do not use debit. On any given day I can tell you what my balance is. Another “side perk” is having cash on you during an event like HURRICANE SANDY!

I have to tell all of you, the budget accompanied by a cash-only lifestyle has been a real life changer for me and my family. I EASILY save $400-$700 a month on stuff like food, wine and gas and I do not feel like I have sacrificed anything.

Have you ever gone cash-only? What would you do with $400-$700 a month? Try the envelope cash only system for 5-7 days and post a comment here!

Speak Your Mind