A Month Without Credit Cards


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.

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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?

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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

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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.

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May 6, 2010