The Benefits of Using Cold Hard Cash

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cold hard cash

A few years ago, when I lived in the Caribbean, my husband and I had to use cold hard cash for everything.

It was my first time using a cash budget, and it was one of the best times in our lives financially. We even paid our rent and our car rental in cash each month. Using this method, we created a great system that worked well for both of us. Because we were so great at budgeting, we paid off all of our credit card debt while living on the island, and we were able to have fun during the process.

Getting Sucked into the Credit Card Game


When we moved back to the United States, we started churning credit cards. There’s absolutely nothing wrong with churning cards, which means opening credit cards to collect rewards points. In fact, I love collecting airline miles so that I can travel for free.

However, I started to notice my budget got out of hand. It was a few dinners out here and a few extra bottles of wine there. Before I knew it, I was coming close to not being able to pay off my card at the end of the month. All those great lessons I learned while living in the Caribbean seemed to disappear.

Getting Back on Track


One of my big goals for 2015 was to get back on track financially. My husband and I instituted a half cash budget where we pay for most things in cash but leave rent, gas, and a few other bills as credit card payments.

I didn’t feel the need to go all cash this time because I was not trying to break a severe credit card habit or reduce credit card debt. I’ve been able to pay off my credit card in full since paying off my debt nearly two years ago, but I knew I could still do better. So, a half cash budget was the solution, and it’s been working great for us.

In the last two months, we’ve saved a lot of money on grocery bills and it’s helped us to be more disciplined. It’s definitely not easy, but I already feel more financially secure just knowing we’re on the right track.

Fear of Missing Out


I know I’m missing out on airline miles by using cash, but I felt this was a necessary step to implement good habits again. If you want to do the same, take stock of your spending habits. Some people have great self restraint. I did too in the beginning when I started using credit cards again, but slowly but surely, expenses creeped in, and became a normal part of our routine.

When you use cash, the benefit is that you know exactly where your money is going (as long as your track it of course!) You become more disciplined. You learn how to cut yourself off and get creative in the kitchen at the end of the month (ramen for dinner anyone?)

So far this cash budget has worked for us the past two months, and the second month was easier than the first. As long as I stay away from major chain stores and stick to the basics, I think we’re going to be able to save a lot of money this year. My only regret is that we didn’t get back to this habit sooner.


Have you ever tried a cash or a half cash budget? Have you tried churning credit cards before but found that it only gave excuse to overspend at times? How do you keep track of your spending?

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Catherine Alford is the go to personal finance expert for parents who want to better their finances and take on a more active financial role in their families.


  • We are currently using a half cash system also. Our bills and utilities are currently paid on our credit card and then paid off each month. Gas for the car is included on the card because unbuckling the kids at the gas station is pretty unappealing. Everything else is cash and when it is gone it is gone. We are not card churning (yet). We use Quicken to track our spending and have been for YEARS.

  • I’m always amazed at how spending-averted I get at the grocery store when I run on cash instead on the debit card. I choose what I put in the cart MUCH more carefully when I’m using cash. It really works!

  • I’ve been using cash for groceries, personal spending money (going out to eat, concerts, shopping,etc.), and household (cleaning supplies, trash bags, etc.) spending for almost 2 years and it has completely revamped my spending habits without much effort! It actually surprised me how little I miss spending on these things–I wish I’d started doing this sooner.

  • Kalie says:

    In the past we’ve used credit cards for certain expenses (travel, gas) for points. Although we never over-spent or paid interest we recognize it’s a dangerous game and now mainly use debit cards. I’m starting to think cash is safer, though. If someone stole your debit card you’re not really protected like you would be with a credit card.

  • We are on a modified cash budget, at least where our “fun” money is concerned. Hubby tutors and gets paid in cash for tutoring and we use that money for “fun” stuff like going out to eat. I put clients on cash diets/budgets all the time, though. It’s a great way to not only control your expenses but to bring greater awareness to your money.

  • I’ve never done cash for groceries because I’m so scared I’ll get to the register and be over and have to put something back. I’d panic. Has that ever happened to you?

  • Clarisse says:

    My hubs just got his first credit card last month. We decided to get a credit card to purchase a ticket online, you really can see the disadvantage when you don’t have cc when you go travel. I still do prefer to use cash especially when going to the grocery store.

  • Mike Collins says:

    I generally prefer using cash but I do make major purchases with credit cards. The danger with credit cards is that you don’t “feel” the spending the same as you do with cash and it is easy to lose track of spending. Like you said a dinner out and a couple of random purchases can add up fast and before you know it you’ve spent more than you can afford.

  • I’m with Robin and I never use cash at the grocery store for I can’t handle going over and the whole process of putting stuff back. With that being said I can see how using cash can be a really effective way of saving money.

    • Cat says:

      Luckily my husband does most of the grocery shopping. He’s pretty good about adding things up as he goes along and knowing what to put back!

  • I use a half-cash budget too. There are some things I pay for with my debit card or checks though mostly for ease. Cash has helped me keep my grocery spending under control, but I need to revisit my entertainment budget and my personal care (hair and clothes) budget as I’ve been going over EVERY MONTH in those categories.

  • I do almost all my spending with my credit cards. I probably spend more than I should, but as long as I don’t go over budget then I’m okay with it… for now.

    I should try living on cash only for a while and see how that works for me.

  • I am a terribly impatient grocery shopper and I actually like everyone to use a credit or debit card to speed the process along. I guess cash is better than writing a check. I’m not sure how many people still write checks in this day and age, but I bet I get behind every last one of them in the grocery line!

  • Jason B says:

    I use cash or my debit card when spending. I refuse to use my credit cards until my debt repayment plan is complete. It’s working good for me right now.

  • Miles says:

    Using cash and debit cards is definitely the way to go. Even better if you can do auto debit for some monthly revolving bills or installment loans. I started doing this when I first used microsoft money to budget and see all expenses. There are several finance and budget software sites thay offer the same. For me, thats the way to go.

  • At first, cash was really the only way I paid for everything, but then realizing that credit cards can be great tools, I learned how to budget around them. It’s amazing how powerful it is seeing the cash amount accumulating on a weekly or monthly basis is. Currently, I save weekly for long term goals with cash, but everything else I pay for with the credit card.

  • I don’t own credit cards so all bills and expenses are paid in cash. The thought of having credit cards makes me afraid as I am not a good spender. It makes me overspend. Paying it in cash is I believe very advantageous.

  • We miss out on a lot of cash back/rewards points because I won’t put stuff on the credit card unless it’s necessary.

    Even without putting everything on the card, our bills can get hairy. We have unexpected repair bills, medical bills, etc. So I can’t imagine how quickly day-to-day expenses would add up to painful sticker shock.

  • Mr. SSC says:

    I’ve used an all cash budget before, but like most people said, not at the grocery. I still walked around with a calculator, but paid with plastic. I found it was easy to be frugal, but I still lacked discipline. If I didn’t leave the plastic at home, when I was out, I’d spend the cash and THEN turn to plastic… Currently, we just enact spending diets, and have a target for our credit card bill each month. It works well for us.

  • Tim says:

    Interesting take… I am on mostly an ALL credit system.. I just find carrying cash a hassle… I keep $100 in my wallet for emergencies/bail money.

    I won’t deny that I might spend a little less if I did cash but most any expense I have is justified as something that I’ll eventually use to make money and thus it pays itself off anyway.

    Groceries would be an exception…

    I’m just not the kind of person who is in the consumer / retail spending money on stuff that I won’t use to make money with.

    So I guess my first defense is built into my spending habits.

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