A cash diet is really the juice cleanse of the financial world. It’s probably not a long-term solution for you, but it can help curb cravings and get your finances back on track. If you’re the kind of person who thinks you spend money faster when you have cash, it’s probably more likely that you just notice how quickly you’re spending money since the cash is disappearing from your wallet instead of just silently accumulating on your credit card.
Take one month to only spend cash for your day-to-day expenses . The easiest way to go about the cash diet is to first run your cash flow. How much is coming in minus how much is going out. (Income) – (Bills, debts, savings) = remaining cash to spend. Take that remainder, let’s say it’s $800, and divide by four. So you have $200 a week to spend on everything else like food, entertainment or transportation. Anytime you use your card instead of cash because you need to buy an item from Amazon or what have you, then take the corresponding money out of your wallet and roll it over to use the next week. For example, if you spent $20 buying dog food on Amazon in the first week, then you roll $20 over to the second week and only take out $180 when you go to the ATM. Using cash will really help you see how fast you’re spending your money and make you think twice about your purchases.
In 2006, New Yorker Cathy Erway decided to stop eating at restaurants and cafes entirely. Saving $7,000 over the course of two years, she chronicled her journey on the hit blog, Not Eating Out in New York. Since then she’s authored numerous cookbooks, including “The Art of Eating In,” and championed many slow food movements. Here are her crafty ideas for saving some of that cheddar.