A Month Without Credit Cards

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On April
1, BargainBabe.com blogger
Julia Scott gave up her credit cards for one month. The goal of
her experiment: find out whether using cash only will get her to
spend less. After a surprisingly spend-happy first
week
(she exceeded her weekly budget by more than 60%!), a belt-tightening
Week
2
and a reflective Week
3
, Julia recently wrapped up her month-long experiment. Here,
she lays out the gritty details.

Call me a statistic.
During my no-credit experiment last month I did just what studies
comparing cash and credit card spending have shown: I spent less
with cash. A lot less. But I’m not about to give up plastic.
Here’s why:

Credit cards
are almost essential for major purchases, unless you want the cashier
to give you a look that says, “You are so in the mob,”
while counting out $500 in twenties. Credit cards are required for
many online buys and to guarantee rentals. If you want to buy a
meal or drink in-flight, no wad of bills will grease your throat.

That said,
I plan to leave my credit card at home on a regular basis unless
I have a pre-planned purchase to make. I can see purchases that
require a credit card a mile away, so carrying around a bottomless
pit of money is just tempting myself. Plus, credit card perks –
my main reason for using plastic – do not add up that quickly.
I earned an average of $16 in cash-back credit card rewards per
month this year, but on a cash diet I spent $200 less. That’s
an awfully big perk!

So what
did I spend my money on this month?

A number of
seemingly random items sucked up my dollars – like bike repairs
and gear in preparation for the Wildflower triathlon on May 1. I
say “seemingly random” because unusual expenses like these
pop up every month without fail. This is the main reason I created
a forward-thinking budgeting system, which you can download
from my blog
.

My totals for
each spending category include tax.

Groceries:
$172.22

Meals out,
including coffee: $21.12

Drugstore items:
$43.10

Bicycling gear
and repairs: $169.38, including $100 to ship bike across the country
and back

Business supplies:
$15.86

Ski trip: $95

House and garden:
$45.52

Gas: $41.57

Camping: $40

TOTAL accounted-for
spending for April: $643.77

TOTAL ATM withdrawals:
$1,000

Cash left in
my pocket: $11

Total unaccounted
spending: $345.23

Total rebates
and gift cards earned: $29.69

Percent unaccounted-for
spending: 35%!

See that last
statistic? A whopping 35% of my dollars disappeared in April with
no trace, which is why I’m not calling the experiment a complete
success. Without these receipts (cashiers forget to offer them and
I forget to ask) the picture of my spending provided above is woefully
incomplete. This also explains why some of my category totals –
like meals out – seem low.

Read
the rest of the article

May
6, 2010

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