Last month I lied to my husband to try to save more money.
He’s the type of person who will jump in feet first and support you 120% if you have a goal you want to achieve. So when I told him I wanted to do a cash-only experiment for February, he was all in.
Back in January, I wrote that one of our goals was to get our food spending under $1,000 per month. Besides rent, food is our highest spending category. And yet, we’ve never seriously questioned it, since it’s a necessity. You need food to live, right? But still, I wondered if we could do better.
That’s where the experiment comes in. For the whole month of February, we’d see what happened when staunch credit card users paid for food with cash only. It was a straightforward experiment (well, except for the lie). Or so I thought. I never thought that while the experiment was happening that I’d hear these phrases from my husband in moments of grim anxiety:
“Are we pretending we’re poor here?” and “Fine. I just won’t eat lunch tomorrow.”
Today we’re sharing the results with you–how we did, my insights, my husband’s, and whether or not this is something you should try, too.
The Fly-by-the-Seat-of-Your-Pants Plan
February arrived too quickly. I was packing my things for my LA trip, when I realized I hadn’t set up the boundaries for the cash-only experiment yet! I was standing at the ATM when the lie took seed. My real goal was to spend $1,000 or less on food that month, but I thought if we put our minds to it, we could get it down to $800. My husband wouldn’t need to know the real goal. I withdrew $200 and came up with some guidelines:
Since my husband does most of the food shopping, 75% of the money went to him, and the rest to me. The $200 would need to last until February 7th. Then the next $200 would need to last for the next seven days, and so on. And of course, we’d need to log every cash transaction into Mint.
The first week went by with full-on enthusiasm. But, by the second, my husband was struggling. That’s when he announced he would be sacrificing lunch the next day to make the goal. I had to come clean. I told him our real goal was actually $250 per week, and not $200. And silly, were you really going to not eat that day??? Like I said, my husband goes all in.
Not wanting my husband to starve himself, I decided to change the rules for the second half of the month. We’d no longer be confined to the $250 per week, but just use cash and see where we netted out in the end. So in a way, it was actually two experiments in one:
- Experiment 1 (weeks 1+2): The classic envelope system
- Experiment 2 (weeks 3+4): Does using cash make you spend less?
How Did We Do?
In February, we spent a total of $860.25, which is our lowest spend from the last 12 months!
|Groceries||$374.32||Any spend at grocery stores–duh|
|Fast Food||$215.91||Work lunches and quick bites|
|Restaurants||$194.15||2 restaurant meals out and takeout/delivery|
|Alcohol||$41.36||Wait–Does alcohol count as food?|
|Coffee Shops||$34.51||Breakfast on the go and weekend coffee|
Mint categorizes alcohol in the Food & Dining category, so the numbers are a little inflated. If we subtract that, then we spent $818.89 on true food expenses.
And did we splash out for the second half of the month when we had no budget? Let’s see:
- Weeks 1+2: $412.73
- Weeks 3+4: $447.52
It seemed to not make much of a difference, especially in the latter half because we met up with family in town and spent $40 at a pizza place. $40 on pizza is blasphemy, I know, but when you have six people eating, it’s often the lowest common denominator.
How Many Times We Grocery Shopped
In February, there were 31 grocery store transactions.
Some of you are thinking: What the hell? Do you grocery shop every single day?
The thing about New York City is that there isn’t one store where you can get everything you need. One store might have super cheap limes, most don’t have fish, and only a few have very important things like mochi. Often we hit up 2-3 stores in a day, all within walking distance from one another. One other circumstantial thing you should know is that we have four grocery stores located 30 seconds from our apartment. Could that be a prime cause of our spendy food habits?
I looked at the number of times we grocery shopped in previous months and there wasn’t a correlation: sometimes we shopped way less and spent way more, and vice versa.
Luxe’s Experience and Observations
The first thing I realized was that I am even more susceptible to cravings than I thought. On the second day of the experiment, I got a whiff of my coworker’s noodles and then overspent on udon noodles for lunch. I immediately felt guilty about it. Cravings are so dangerous!
I also had to train myself to use cash. A couple times I forgot about the cash experiment and charged lunch. When that happened, I’d take that cash out of my wallet and put it in a drawer so it wouldn’t get used twice. Using cash wasn’t natural for me. I always use my credit card. Even if it’s to buy a 99-cent ice cream from McDonald’s. Yes, I’m that person.
Oh, and the thing I missed the most? The reward points!
Every time I handed over cash to pay for something it triggered a pang of regret: Missing out on earning points for travel hacking purposes.
While I was resentful about missing out on rewards, there are still some worthwhile lessons I picked up during the experiment.
1. Using cash makes you more mindful.
Too often in our lives we swipe without thinking. Money is some kind of make-believe thing that will always be there. But that’s also how people get into trouble, swiping their card for things they can’t afford. It also forced me to choose. Sometimes I’d look at my wallet and only had $4 in there. Then I’d have to ask myself, do I want this bad enough to go to the ATM? Or can I just skip it? Most of the time, it was the latter.
2. Yes, there is such a thing as splurging on groceries.
Grocery shopping is a hidden minefield for your budget. A mind-blowing thing I learned is that grocery shopping can get out of control fast, because it doesn’t seem luxurious or splurgey. We need groceries to survive, right? But it’s so easy to justify spending on things like cookies and sweets. Prior to the experiment, I’d shop with a list, but then just add whatever else I wanted to the cart. It was definitely a rude awakening to get the cash register and then have to put back all my unnecessary purchases:
OK, so our cash-only experiment started this month, and there are already some tragic results: I was at the grocery store and had to put back necessities like chocolate chip cookies, chocolate trail mix, and matcha yogurt, because I didn’t have enough cash in my wallet.
— The Luxe Strategist (@luxe_strategist) February 8, 2018
3. It helps if you actually want to save money.
Before the experiment, I never made grocery shopping decisions with saving money in mind. But I realized that a subtle shift in mindset, a willingness to save, made a difference. For example, I’d be at the grocery store, pick something up, and really weigh whether or not it was worth buying. “OK, I’m trying to save money here,” I told myself. Recognizing that I had a goal made it easier for me to stave away the impulse buys.
My Husband’s Observations
And my husband’s experience, in his own words:
1. I was clueless about how much things cost.
I do all the cooking and most of the grocery shopping in our house, so I think it’s safe to say this experiment weighed more heavily on me. Luxe enjoys eating well as much as anyone, but her approach to food is simple and strict: 1) Plan ahead 2) Keep it simple 3) Buy only what you need. I am the complete opposite of all these things. Not only that, but until this month I never really paid attention to how much individual grocery items cost. Like, at all. I would just toss things into the cart without a care in the world! Artfully packaged coffee beans? Fancy fruit preserves? Small batch granola? LET’S HAVE ALL OF IT PLEASE! Then…SWIPE goes the credit card and it’s home and in my cupboard without my having thought twice about the cost or value. But, whoa…the cash experiment. All of a sudden I have a diminishing supply of cash in my wallet and now I’m studying the prices in the bread aisle at Trader Joe’s with the rigor and focus of a medieval scholar poring over an ancient scroll. Using my money in its physical form (cash) triggered something primal in me. It made me more aware, more protective; like suddenly I was a caveman guarding my stash, scanning the horizon for predators, mindful of surviving the month (let’s face it folks, Trader Joe’s on a Saturday morning is a dangerous place!)
2. Making meals that last also makes your money last.
Cooking meals that yield leftovers is Frugal 101 material and obvious stuff for most readers of this blog. For me, however, dropping $25 on supplies for a one-night meal of barbecue braised short ribs (yum!) can be par for the course. Within the framework of the cash-only experiment, though, this is clearly a no go. Forced to economize last month, I made at least EIGHT MEALS that lasted for multiple days: curries, chilis, homemade mac and cheese, etc. Like I said, for you this might be routine, but by my standards I now consider myself the Michael Phelps of the Frugal Olympics. I also got inspired to maximize pantry staples and make cookies, cakes, and other assorted treats that would have added another $100 to our food bill had I just bought them in a store. One Saturday morning, instead of the usual bagel with cream cheese ($3.80) I busted out the flour and butter and whipped up some fresh biscuits for my breakfast sandwich. HAS FRUGALITY EVER LOOKED SO DELICIOUS??
3. Bravely exploring the back of the fridge can inspire great discoveries.
One Sunday I was cleaning out the refrigerator and found a tupperware in the way back that had clearly been in there a LONG time. I’m talking carbon-dating territory, folks. Normally I might toss the whole thing in the trash without being brave enough to open the lid. But for some reason I peeked inside, saw some breadcrumbs I had made at least six months ago and thought “Breadcrumbs don’t really go bad, right? Isn’t the whole point of breadcrumbs that they’re stale?” After looking in the freezer and seeing some frozen pork the idea for TWO WHOLE NIGHTS of spaghetti and meatballs was born! Normally I would have just gone out and bought new groceries, but getting resourceful and exploring the “scary” parts of the fridge for inspiration turned out to be a total win.
4. Whole Foods is an evil black hole that swallows my money.
If Whole Foods were a Las Vegas casino I would be fully comped with free hotel rooms for life. They’d keep the Presidential Suite open at all times just in case I stopped by with my big fat wallet. That’s right, folks, I am a hot-shot HIGH ROLLER at Whole Foods. I can somehow turn three oranges, a wedge of cheese and a loaf of bread into a $75 purchase because apparently I am some kind of magician at making money disappear on food. But with cash, the opposite suddenly became true. I would walk out of the cheap-as-hell Chinatown supermarket amazed that somehow–for $22–I had enough meat, produce and condiments to feed us for days. Whole Foods is a trap, folks, and I can say that one of the enduring takeaways from this exercise is that I won’t let it be my lazy default setting anymore. It’s conveniently located near my office but from now on going a little more out of my way will be well worth it.
5. Learning to plan ahead is essential.
My brother was in town last weekend with his kids and we all had a nice family lunch, but MAN did I choose poorly when it came to the restaurant. Figuring that a) pizza is always a good choice for kids and b) for convenience, I should pick a place near his Times Square hotel, I settled on a spot I was familiar with because my workplace orders in food there for meetings sometimes. When the new “cash-aware” me sat down and started looking at the menu I nearly had a stroke: the toppings were FOUR! DOLLARS! EACH! Are you kidding me?? And of course my hangry nephews were shouting out their demands for pepperoni and sausage and all the works. Thus I somehow managed a pizza lunch for 6 for the ABSURD price of $80. Ugh! What I should have done–and will certainly do next time–is not pick a place in a touristy (i.e., more expensive) location and look at the prices on the darn menu online before showing up and dropping $80 on pizza. We did have one other restaurant meal last month, and while it wasn’t outrageously expensive ($65), it was still roughly 7% of our overall food budget for ONE MEAL. Paying with a credit card I wouldn’t think twice about, but seeing the waitress carry away my precious bills…dang.
6. I struggle managing my emotions when it comes to food.
Luxe can happily survive for weeks on a pack of Twizzlers and a salt lick, but I will INSTANTLY turn into a giant man-baby if I can’t have the exact food I want exactly when I want it. Such an attractive quality, right? It’s hard for me to plan ahead because I’m not really sure what I’ll be in the mood for three days from now. Naturally this drives Luxe crazy, and rightly so. Planning is essential to optimizing any kind of budget and food is no exception. The cash exercise forced me out of my usual mindset of “I am a culinary artist and will cook however my delicate whims inspire me.” This was hard for me and there were definitely a couple “food tantrums” when I knew that making whatever I wanted wasn’t feasible if I was going to properly manage the cash I had left for the month. But now I have a better awareness of how mindful food planning can mitigate costs. I’m not saying I’m perfect all of a sudden, just that I know that I have to stay disciplined (and not be a baby) to keep costs down consistently, not just for one month.
7. Short term changes can erase bad habits.
One of my (many) quirks is that I don’t like to linger in the house before leaving for work, so I don’t stick around for breakfast. Every day on my way to work I stop by our local coffee shop and pick up a $3.50 muffin. Multiply that times 20 work days in a month and — OH MY GOD — that’s $75! Normal credit-card me did not think twice about this, but halfway through last month it dawned on me how indulgent it was. So, a few mornings a week I tried having an egg on toast at home. I also bought a pack of granola bars I can just eat at my desk. After a couple weeks, my extravagant muffin habit disappeared! This is the biggest takeaway of all for me: So much of my spending is habit, and habits happen without thought. Going cash only forced me to THINK about every purchase and consequently to question and confront habits. The breakfast habit was so easy to break that now I feel inspired to see what other mindless spending I can conquer!
8. Your wife’s money lies can be traumatizing.
Folks, that lie Luxe mentioned in the beginning? I almost had a nervous breakdown! I truly was ready to skip lunch that day…or at least get by on the soup crackers they have for free in my work cafeteria. (And, PS, not once during the whole month did missing credit card reward points even cross my mind. See how different we are?)
It’s me, Luxe, again.
While our experiment covered food spending, it doesn’t mean you can’t apply the lessons to other categories, as well. For example:
Whether it’s kids’ activities, having two cars, cable TV, or some other “necessary” expense, ask yourself: Is there really no way to reduce this spending, or do I just not want to? You’d be amazed what you can change when you’re really forced to think about it.
Drastic measures can yield quick results.
Need a quick win right now? If you tend to overspend, and want to make a difference fast, then consider a cash-only diet in your problem category. If it’s shopping, then try a no-shopping ban for a month. If you tend to spend too much when you’re on vacation, try setting limits by using cash, instead of your credit card. (Although, use your discretion whether or not cash is safe in the country you’re in).
Having goals makes a difference.
Is willpower alone going to help you achieve your goals? No, but having a purpose can still make a difference. When you are trying to save money or cut expenses for no real reason, it’s easy to lose steam. Visualize your goal. Print out a picture of what you’re saving for. Reminding yourself why you are saving often helps you pause and think. Sometimes pausing and thinking is all you need to say no to an unnecessary purchase.
Limitations can breed creativity.
Nothing inspires creativity like having limited resources. Don’t have much money, but still want to be stylish? Instead of buying new stuff, shop your own closet and think up new outfit combinations. Or go to a thrift store and find pieces to mix and match with your existing wardrobe.
By using cash to pay for food for a month, we spent almost $300 less than usual. If we keep it up for a year, we could have about $3,600, which is enough for a plush vacation for two. An extra vacation? I’ll take it. So would we recommend a cash-only diet? Absolutely. Trying it for as little as two weeks can definitely uncover awareness about ingrained money habits. And while it’s a simple experiment, you might be surprised by what you find.
Have you ever tried a cash-only diet? Do you think we grocery shop too much? How did you decide on your food budget?