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The Cash-Only Spending Plan

Jonathan Swanburg
By: Jonathan Swanburg
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I received a call from Alexandra Holterman, a writer for the Work & Money team at Refinery29. For the sake of an article, I Spent Two Weeks Using Only Cash - Here's What I Learned she was going to spend only cash for two weeks - avoiding credit and debit cards - and wanted my thoughts on the experiment.

I explained that while a cash-only spending plan may be a good solution for the person addicted to credit card debt, it isn’t the right answer for everyone. In fact, the saver simply looking to cut down on expenses may find that using cash exclusively (avoiding credit and debit cards) ends up costing significantly more in the long run.

While her experiment had its successes and failures, she does a good job of laying out the important points if you are going to try this at home:

  • Start with a budget to determine where your money goes.
  • Set daily spending limits on point-of-sale purchase decisions.
  • Don’t buy things you don’t need.
  • Limit the cash on hand so the money doesn’t burn a hole in your pocket.
  • Be prepared to give up the perks and convenience of cards.
  • Avoid so-called "spending holidays" that simply postpone inevitable expenses into the future.

Finally, she concludes:

“The most important takeaway remains: choose a money management technique that works for you. I might not use only cash from now on, but if there’s one thing I’ve learned from this experiment, it’s knowing that the rest of my emergency money will be used for just that: emergencies.”

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