The “Cash Diet” Challenge



Only Numbers

Losing touch with our money is becoming a reality in this fast-paced, pay-with-plastic world.  The fact is when we look at our bank accounts we see numbers rather than money.  Just as an elevator in a building takes us up or down to any floor, so do deposits and withdrawals affect our bank balances.   The frightening experience is when the elevator drops our balance below the ground floor, plunging into dark and dismal negative territory.   For me, this happens when my withdrawals exceed the deposits.  No surprise there.  Since the tendency is to blame someone or something for our misfortune, the culprit may be our method of payment.  The little plastic card, whether a debit or credit card which supposedly is intended to make life convenient, has become too convenient.  Our account balance might look different if we were given a limited amount of cash to pay for our discretionary purchases.     

“Wait a minute! No one carries cash so why should I?”  I hear your reasoning. A good motive is to gain control over the rate of withdrawals from your account and to instill more saving. If you wanted to be healthy physically, the advice is to “eat less and exercise more.”  To stay healthy financially, we are advised to “spend less and save more.” A “Cash Diet” for personal expenses may control the numbers dropping your bank balance.  Oh, but how we dislike and despise diets whether related to food or money! 

Seeing The Problem

When we rely on plastic cards, we fool ourselves into believing we have access to an unlimited pool of cash.  We are banking on our next pay cheque to make the next credit card payment.  If you are like me, you can tell yourself “I am in control of my spending” but in reality sometimes I am out of control.  Out-of-control spending brings the usual lecture. “You should know better.”  After walking into Suzanne’s, a women’s clothing store, at the peak of their summer sale, somehow I was lured into purchasing four pairs of capris because the sale price was fantastic. The deal was: the greater the number of items, the greater the discount.  Another reality check!  No matter how great the sale, you still spent more than you intended.  Bottom line is I spent $150 even though I saved $45 off the regular prices. Believe me, I can justify the circumstances along with the best of you. For women, the weakness may be clothes; for men, I’m told it’s big ticket items which lures them to spend. “Go Big or Go Home!”  Had I walked into the store carrying cash with the intention of spending $50, I would’ve had to choose. Today I could’ve been $100 richer.  Do you ever find yourself justifying your motives with would’ve and “could’ve”? Rationalizing doesn’t change anything. Take another occasion when I forgot my purse at home. All I could spend was $20 on groceries with the cash stashed away in my vehicle for emergencies. I knew precisely my limit and stuck to it because I didn’t have any alternatives.    

Cure What Ails Your Bank Account

Out-of-control spending is often cured with an allowance, a specific amount of cash for weekly discretionary spending. Typical discretionary expenses refer to entertainment, restaurants, hobbies, or gifts but overspending in any category, even groceries and fuel, can be problematic.  You are looking to curb your spending in the problem areas.   Generally, the fixed expenses, such as utility bills to maintain your home or vehicle expenses used for employment purposes are requirements. There’s no question – these bills are necessary. The challenging task is to determine a reasonable cash budget for the balance. You have to make it on that amount. If you spend too quickly, you will learn you do not have any cash remaining for the balance of the week.  Planning wisely how to live on a cash diet is exactly what 23-year old Kathleen Elkin is learning as she attempts to live on $125 a week for her daily purchases outside of rent and utilities.  You, like Kathleen, will learn that it can be hard to stay on track when out-of-the-ordinary expenses, like a wedding gift, crop up.  Click here to read Kathleen’s story about her “Cash Diet”. 

Why live on a “Cash Diet”?

Many might  ask why anyone would want to attempt this challenge.  The answer isn’t complicated.  Witnessing first-hand how quickly cash can be spent and exactly how much is being spent is eye-opening.    Another reason is to simply get in touch with your money and gain control when you have specific goals you wish to attain. Providing a cash allowance each week helps better plan how the allowance will be used especially when dealing with those run-away items.

When you want a bird’s eye view of your spending frenzy, tracking your expenses shows where the brakes need to be applied. Tracking can help to a certain extent. However, if you want to make a sincere effort to reduce the total, using a “cash diet” may be the answer to limit your spending.

The Challenge

The all-too-familiar word, “diet,” frightens many into understanding that changes to eating habits are necessary. Whether a bathroom scale or a doctor is screaming loudly, we know the reason for dieting is justified.  The same can be said about bank, credit card, or net worth statements.  These statements can also be screaming, “Reduce your spending. Spend sparingly.”  If you are up to the 30-day challenge, try implementing the cash diet in your frantic, quick-pace world and test the results. Find out whether a “cash diet” can make a difference in your world.