It’s Hard Without Habits – July Cash Experiment Update

by The Happy Rock on July 11, 2007

10 days into the July Cash Experiment and we have seen our share of speed bumps. First was forgetting that Sunday the 1st was actually July. I hadn’t withdrawn any cash to start the month. My preparation wasn’t there and I resorted to the debit card to avoid a 2.00 ATM fee at Target. Probably not the best choice for the experiment’s sake, since dealing with fees is something that must be balanced when using cash.

The next speed bump was with paying tolls. I have EZ-Pass, an electronic toll collection system, so I haven’t paid cash in years. The ez-pass allows no waiting in lines or even stopping for that matter. I love my ez-pass, but the scary part is that I forget that money is exchanged when going through tolls. $30-$35 a month that is so automated I don’t even notice it anymore. With cash there would be no way to miss shelling out $3.00 every time I go into Pennsylvania.norway speed bump

One trip to the grocery store, I realized that I only had about $90 in cash. The bill came to $92, luckily I had my wife’s wallet with me to scrounge up two more dollars. The really interesting part is that I usually spend $120+ each week. $92 vs $120+ and amazingly we don’t feel like we are missing anything.

The last speed bump was the camping reservation that was held with a debit card, and then automatically debited when we checked in. An example of just how ingrained plastic is into our consumption.

The biggest problem has been that lack of habits surrounding spending cash. Not only do we have to fight our ingrained plastic spending habits, but we also do not have any cash habits. Things like a weekly trip to the bank/ATM and budgeted spending amounts (so i can make sure I have enough cash) will make spending cash much easier. Forming habits in your finances is a great tool for success. Habits like paying yourself first, automatic savings, and regular budgeting go a long way to making valuable tasks simple and reoccurring. We all have habits it is a matter of whether they are productive or not.

I haven’t reviewed any numbers yet, since I don’t want to skew the experiment. My gut tells me that we will save some money. Even if we don’t, the adventure from our comfort zone will provide some nice growth and perspective.

I refer you to Zen Habits for a few tips on building habits. Zen Habits is an amazing blog about forming positive habits in a variety of areas. Here are a small sample : how to stop a bad habit, 10 finance habits, and habits and goals.

{ 9 comments… read them below or add one }

Lazy Man and Money July 11, 2007 at 7:37 pm

My gut is that you’ll save money because you are being super conscious of it for this month. If you were to continue with the experiment for 6 months, there’d probably be a point where spending cash becomes second nature. Thus it would be just like how you were with a credit card last month.

Finally, a number of people have the philosophy of if they carry around cash they spend it. My wife is like this. However, if there’s no cash being carried around, there’s no spending it.


The Happy Rock July 11, 2007 at 9:37 pm


I agree, that is why I have done my best to avoid making the experiment a self fullfilling prophecy. I have been trying to carry plenty of cash around so that I am not consciously trying to spend less. If the cash is unlimited then it should be just like plastic.

The plan is to further the experiment in later months by budgeting with an envelope type system and see how that affects things.

I know people say they spend the cash if they have it, I am one of those people. The research suggests that people spend more across the board spend more when using credit cards though. That is why I am testing the research.

Cheers, thanks for the input.


Mike July 12, 2007 at 2:01 pm

I always found that having a limited amount of cash in my wallet did more to limit my purchases than buying with cash. That was the virtue of cash – it’s finite and tangible. In your grocery store case, if I knew I had $90 to spend, I’d get under $90 (and probably improve my math skills after a few trips). In other words, I’m pretty much agreeing with Lazy Man and Money. Cash is a budgeting technique – out of cash, can’t spend money.


TheHappyRock July 12, 2007 at 2:50 pm

Mike – Thanks for the comment.

I agree. Cash does help you force budgeting. There is usually a limited amount vs. ‘unlimited’ with credit card. I suspect that is part of the reason that people do spend less.


dong July 12, 2007 at 3:46 pm

I think some people are more succesful by using only cash, and other are more succesful if they only go credit. Personally, I’m better if i don’t have cash in wallet, and put everything on my credit card. Spending money on credit is a more active calculation for me. Once i’ve withdrawn cash, it’s like I’ve already spent it….


The Happy Rock July 12, 2007 at 3:58 pm


I agree that for any given individual the most effective system may vary.
On the other hand research and retailers support that notion that credit card are much better for business. This is precisely why I am testing it myself. I also feel that if I have cash I will spend it, but I would rather not rely on my anecdotal support when the research disagrees.

Either the research is wrong, I am an exception, or I thought I was an exception, but I was really deluded.


Sue Olson July 17, 2007 at 4:05 pm

So very interesting…I was thinking about habits as I finished my grocery shopping jsut a few hours ago. The habit my husband has of going shopping right after I do to ‘pick up’ items that I ‘forgot’. Well, I am guilty of going without a list so there is not one for him to put items on, but he his guilty of picking up WAY MORE than he went out for which totally blows any chances of sticking to a budget! Whew…habits…they can be scary!


jewell October 19, 2007 at 12:56 am

I’ve gone through your blog but cannot find the results of this experiment. My husband and I have changed over to a cash system, and, aren’t really having much of a problem. We keep the cash in a manilla envelope with a white envelope for cash, and another for receipts. We record what was spent on a cover sheet so that we can record in our budget and deduct those items which could be a business write off. Love to hear how your experiment worked out for you.


campervan christchurch rental May 13, 2008 at 7:08 pm

Hi there,

Thanks for the post.

I think saving involves a number of things.
I have friends that can’t save if their life depended on it and I also have friends that are always on a tight budget. A lot of it is habitual and qualities are built up in us from the time we get our first pocket money.

Since I was young, I learnt to save money for the things I needed rather then the things I want. For many people, it is hard to draw a line between needs and wants.

I guess everyones needs and wants are different.

Do you have any advice on how to decide what our needs and wants should be? Just a general idea?




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