The “Paying Cash” Experience - 2 Months Later

Posted by Debt Destroyer on November 25, 2008

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Some of you may remember that at the end of August I decided that starting in September, I would start paying cash for certain items (groceries, household stuff, & entertainment).

Obviously I hoped that this would lead to major savings. Dave Ramsey professes that paying in cash will save around 12% or even more! I was shooting for savings of around $100 per month.

I have to admit that it was a little weird paying for stuff using cash after so many years of putting everything on plastic. Especially at the grocery store where the bill can easily be over $100. But very quickly I started to have fun in those situations. I think I surprise the clerk when I start flashing the AJs around (Andrew Jacksons).

As luck would have it, I’ve charted my expenses for 4 months (2 using credit cards, and 2 with paying cash). So how about we see how things are going so far?

In July & August we spent on average:

$507.62 on groceries
$145.66 on household items
$67.06 on dinning out

For a total of $720.34.

In September & October we spent on average:

$481.92 on groceries
$133.18 on household items
$81.31 on dinning out

For a total of $696.41

Paying cash has been saving me $24 a month.

I know that $24 isn’t all that impressive, but at least I saved.

Actually I have a hunch that November’s grocery expenses will be much lower than previous months. I think this for a couple of reasons:

My daughter’s food allergies improved enough so we no longer have to avoid wheat & dairy.
I hit some “sales” and stocked up on lunch items. I don’t think I’ll have buy lunch until mid December

But there’s plenty of time left, so who knows what could happen. It was mentioned in the comments of my last expense report , that I should try an envelope system to see real savings.

So that’s what I’m going to do.

Starting in December we’ll set aside $450 for groceries, $125 for Household stuff, & $75 for going out. The last two amounts will be lowered in January to $115 & $60 (I’m giving us a little bit extra for the holidays).

If we can make the January amounts work, that would be $620 for those three categories which would be $100 less than what we spent on those same items in July & August.

And that would be great!

Come winter, we need to save money any place we can because as I alluded to way back when in my Nitty Gritty post, heating costs are a killer! I keep meaning to sign up for the budget plan, but I never get around to it (I did fill out an online form requesting this, but that seemed to do nothing).

Enough of my ramblings…

Do any of you use an envelope system? Does it work? Was it hard to get used to? Did you stick with it?

I’m looking forward to hearing some of your experiences.

Until next time,

-DD

» Filed Under Cash, Experiments, Money Savers

The Ingredient Experiment - Save Money And Eat Better

Posted by The Happy Rock on September 1, 2008

On the heels of Debt Defier’s commitment to attempt a cash only month I have a food related experiment that I am doing for September. Hopefully, the Debt Defier has better luck with cash only spending than I did.

I will be attempting to buy only ingredients for the whole month of September. I know that might sound a little vague, but here is the idea…buy only items that are naturally occurring and can be used to make meals. The goal is to cut out things like crackers, chips, expensive veggie burgers, and ice cream to increase my intake of fresh vegetables and fruits while being able to control the exact quality and quantity of ingredients on all the food that I eat.

The main goals are :

To Save Money. Ingredients are cheaper. A box of chips ahoy is $3.50 while you can make a batch of much more healthful cookies for much less, especially if the oven is already hot. A Lean Cuisine is $4.00 but you can make a healthy pasta meal with vegetables that will feed a family and have leftovers for the same price. A Snickers from the vending machine each day costs you about $200 a year plus it will add about 20 pounds if you don’t burn the extra calories. Eating healthier will also save money on medical bills.
Gain Energy. With the reduction of simple processed carbohydrates and sugars and increasing more healthful foods I will should feel better rested and have more energy. The food we ate is closely connected to our physical nature. I have noticed a large increase in energy and motivation as my eating habits have migrating to a much healthier diet over the years. I can now see the effects of a loose eating weekend and how it affects my overall energy and even my sleep. Hopefully there isn’t a major detox period from all the snacks and sugar. So far the psychological need to snack is the biggest hurdle.
Promote Healthy Habits. Treat my body better in order to improve overall healthfulness. Also changes like this tend to inspire other healthy changes like more physical activity. I hope to pick up with the 100 push up challenge were I got side tracked. Energy, rest, and health also contribute to overall happiness.
Encourage More Experimentation. Experiments keep you on your toes. They make life and change exciting without a long term commitment in case you don’t like the experiments outcome. Experimentation also breeds more willingness to change.

With that said the experiment will have to be a little vague, because I can’t anticipate the full range of ramifications. I will try and adhere to the guidelines and the spirit of the experiment as much as possible and make executive decisions as I go. I know ingredients for some are prepackaged food for others. Things like bread and pasta can be made at home, but for most they would count them as ingredients. For me, for now, they are ingredients as they don’t constitute a ready to ate food/meal. Maybe I will try my hand at baking my own bread, but for now I found to focus on the low hanging fruit like vending machines at work, expensive frozen foods, protein bars, etc. Anyone feel inspired to embark on a similar journey?

For those that want a crazy challenge The Happy Rockette is attempting a 100% raw vegan diet for the month of September. I wasn’t quite ready for the type of discipline needed for full raw foodism, but I am interested to see if The Rockette gets the reported major improvements in mental clarity, weight loss, energy boosts, libido burst, other overall health benefits. She isn’t planning a life long switch, since from her professional opinion(Registered Dietitian) it isn’t a sustainable lifestyle, but I love her willingness to try an extreme experiment!

» Filed Under Energy, Experiments, Food, Health

The Vegetarian Experiment – The Happy Rock Goes Veggie In January

Posted by The Happy Rock on January 11, 2008

That’s right, the whole Happy Rock Garden is going vegetarian for the rest of January. I mentioned that I am not fond of resolutions, so here is an example of one way to spark change without resolutions. Experiment! I will track being vegetarian for the month and the associated costs. Updates when appropriate.

I got the idea from Steve Pavlina’s 30 day raw food experiment. Even though his experiment is quite off the beaten path, I am finding his raw food chronicles extremely interesting. Like most things in life there is a path that has gotten me to the point were I am willing to give up meat. I personally love meats of all kind, even Scrapple! I not even ‘doing it for the animals’.

Why am I doing it then? Here is why:

First and foremost I have seen the benefits of eating healthy. In the college cafeteria I must have had 2-3 plates of French Fries and multiple deserts each day. Since I met my wife, I have eaten more and more healthy with each passing year. With each passing year my energy level, mental clarity, and emotional states have seen equally positive results. We already eat vegetarian dinners 1-2 nights a week, so the change won’t be as extreme as you might think.

I have experience a body of evidence that has piqued my interest as to the positive health benefits as eating very healthy. Things like the potential for less colds, injuries, cancers, and weight along with positive benefits like more energy, vitality, sex drive, mental faculties, and a positive emotional disposition. Interesting science data like this chart that compares human anatomy to that of carnivore, omnivore, and herbivore that seems to support that humans are designed to be mostly if not all herbivores. Books like The China Study and Eat to Live are also very intriguing. We even have friends of ours who tried the Eat to Live diet for a while and reported feeling better than they ever had.

Lastly, why not? I am grateful to live in a country that affords me the ability to try out better ways of living. If I miss meat or don’t see the benefits, it is only a couple weeks. The process and the learning will be quite valuable.

We started on Monday the 7th, and so far I do feel really good despite not getting my normal amount of sleep. I haven’t experienced any detox symptoms, which can occur as your body adjusts and purges any unwanted materials.

I have quickly adjusted to eating, and I don’t feel hungry all day. In the past when I have eaten vegetarian meals, they just wouldn’t hold me over for long. I am probably eating less food(calorically) than before and my snacking has changed to fruit.

I will do my best to track the financial side of eating vegetarian, but I am not sure 3 weeks or so will provide enough data for accurate comparison. I suspect the cost won’t be too different, because quality meat is often quite expensive. I will also track my weight, which started at 200 pounds(my highest weight ever). I have lost 3 pounds in 4 days, but I suspect that might equalize in the next week. If people are interested in recipes, leave a comment and I will get the recipes from the Happy Rockette. I will say that having an awesome wife who enjoys cooking is a huge blessing and greatly appreciated. The meals have been extremely interesting and pleasurable, and the meal I ate for lunch yesterday at work was getting lots of attention just from the scrumptious smell.

If you have any questions of comments, feel free to ask away.

» Filed Under Experiments, Food, Health

Cash Only Spending Experiment Analysis

Posted by The Happy Rock on January 9, 2008

Time to clean house. I have been carrying this dirty laundry around, since August.

In July I started an all cash experiment to test the Dave Ramsey argument that you can save 12-18% just by spending cash. View the cash only experiment details here and the benefits of spending cash here.

Some readers have asked me for the results of the experiment while back, but I admit I have none to offer. It took a few months, but I am finally willing to admit that the experiment was a failure. I apologize.

We didn’t fail to complete the actual experiment. We did go all of July without swiping plastic once, but what broke down was my ability to analyze the results. I still have an envelope with the receipts I was able to save from the experiment, but I don’t think I will be able to glean much from the incomplete set of data.

The truth is that the no cash month was such a radical change in my habits that I was beat down by the end of the month. I didn’t have the energy to stay on top of things during the month and I was so discouraged at the end of the month that didn’t complete the analysis. I think part of me didn’t want to see that it saved money, because I wasn’t ready for the change. Another part of me wasn’t sure that I had been diligent enough in my record keeping to make the data meaningful.

I have wrestled with it and tried to slide it under the rug, but the spirit in me that desires change won’t let it go any longer. The Happy Rockette also added some words of encouragement.

Yes it seems silly that a trivial change like spending only cash got the best of me, but it really did stress a large number of ingrained habits and required a lot of energy complete. I am OK with failure as long as it is a pathway to growth. With this admission, I think it will become just that. The time and energy was by no means a waste. The next time I try the experiment again or even different experiment I will have more insight, wisdom, discipline, and knowledge to bring to the table.

Sorry to disappoint anyone that was truly interested, but I hope to resurrect the experiment again with much better results. Is there anyone that would be willing to join me in the next effort? With a little more planning and discipline I think we could get some meaningful data out of it. Data that can help save money and improve lives!

» Filed Under Cash, Experiments, Psychology of Spending

Top 5 Reasons The New Year’s Resolutions Fail

Posted by The Happy Rock on January 7, 2008

Like clockwork New Year’s comes and everyone fantasizes about some habit they want to kick or a good behavior they want to start. I was on the resolution train for years, only to realize I was lucky to make it to February. I am here to offer some reasons why New Year’s resolutions aren’t lasting recipe for change.

Resolutions are so common place that everyone feels like they need to do them. They get created out of habit rather than conviction, motivation, or passion. Even if the desire is there, the planning and preparation are often half hearted or non existent. Writing them down, planning, preparing, reading, and learning are crucial to creating lasting life changes. Half the time we can barely recall what the previous year’s resolution.
Resolutions are often derive from negative emotions. Changes that are built around positive results and motivation, rather then ‘stopping’ something have a much greater chance to be successful
No accountability. Everyone knows resolutions fail, but we try anyway without changing the formula. We rarely involve family, friends, or support groups and no one cares(even ourselves) when the resolution is abandoned by mid January.
Resolutions are overwhelming. Our unhappiness with the past year or our zeal for the New Year causes us to bite off way more than we can chew. The huge weight we create for ourselves serves only to drag us into hopelessness. Smaller specific goals are more likely to be achieved. Even the divide and conquer method can be a great help.
Resolutions are too broad/general. Vagueness usually leaves room for use to say ‘yeah, sure I did X in 2007’. ‘Spend less money in 2008’ is a admirable goal, but it is unlikely to have a significant impact on your life without quantifying how much you spend now, having a specific target goal, and measuring your progress.

That has been my experience with resolutions, hopefully yours is different. Is it?

What’s the alternative? The real goal is to create a life attitude and structure that constantly embraces and promotes self growth, rather than one that skates along the whole year until some arbitrary day where culture says you should try to change something about yourself. Is New Year’s a great time for reflection? Absolutely, but it should be just one many reflection and change points throughout the year, not a day that you need to make up for all the lost time of the previous year. Another alternative is 30 day experiments with proper preparation and motivation. They can be excellent ways to create positive self growth.

» Filed Under Accountability, Experiments, Habits, Motivation

Recovering From The Microsoft Money Server Upgrade

Posted by The Happy Rock on August 10, 2007

I cleared a hurdle I had been putting off for about three weeks now; I spent about two hours tonight bringing my Microsoft Money records back up to date. It was two hours I didn’t have, but two hours that were sorely needed. In mid July Microsoft decided that their Money servers need a complete overhaul. Since that time I haven’t been able to download my transactions for my ING Electric Orange checking, savings, or my one credit card. With the July Cash Spending Experiment in full swing, I wasn’t too worried about it since my normal way of operating wasn’t needed. Now with July over, I finally needed to bite the bullet and fix what they broke.

To be honest I did spend about 20 minutes searching for better personal finance software options, and thought about upgrading from Money 2005 to 2007. I didn’t switch or upgrade, because I honestly don’t have the time and energy to invest in learning a new tool. Plus I have three years of budgeting and finance information in Money format. I would love to entertain any reader suggestions about possible good transition software from Money. With that said, Money suites my needs fine.

After some minor frustration and keyboard pounding I was able to trick Money into being able to access my accounts again. The big tip was to go to the financial institutions and download the transactions manually to help Money learn. Believe it or not, it really helped. Once that was done, I had probably 100 transactions to reconcile and categorize. That is my favorite feature of personal finance software. It really helps my conceptualize and track how much money we are spending and were it is going. Money can also do some simple charts which not only look pretty, but can serve as good marriage communication tool. I finally finished up by taking care of some bills.

I could have really used the two hours for other activities, but it really feels good to have that squared away again. The next big task is to square away the pile of receipts from all the July cash spending, and see if we actually saved any money.

» Filed Under Experiments, Finance Software, Personal Finance Systems, Productivity(Financial)

What bloggers are saying about canceling cable and TV.

Posted by The Happy Rock on July 18, 2007

Yesterday I posted some eye opening statistics about TV viewing. Today I wanted to wrap up the canceling cable experiment by searching the blogosphere for some bloggers that had already tried giving up cable or had relevant posts. Here is what I found :

Gary Lee just recently canceled cable and is still adjusting.

Boomie @ The Wastrel Show downgraded to basic cable just a week ago.

Lazy Man tried to hack a cable free solution.

Clever Dude talks about not upgraging his viewing experience.

FMF @ Free Money Finance admits he doesn’t have cable.

And finally Trent @ The Simple Dollar discusses 10 reasons to cut out TV in one of his most popular articles. He then talks about dropping cable in a later post.

Enjoy

» Filed Under Bloggers, Experiments, Links

It’s Hard Without Habits - July Cash Experiment Update

Posted 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.

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.

» Filed Under Cash, Experiments, Habits, Spending

Benefits And Drawbacks Of Spending Cash

Posted by The Happy Rock on June 29, 2007

In honor of the upcoming cash spending experiment I wanted address the benefits and drawbacks of spending cash. I will revisit this list after the cash experiment to see if I have anything to add or critique.

Benefits of Spending Cash

First and foremost, spending cash makes it impossible to spend more than you have. Going into debt is impossible with cash.
Forces us to face the consequences of a purchase up front rather then delaying it until after it is too late. Thinking through the consequences of a purchase may change your decision. By consequences, I am talking about making needless purchases, over-priced purchases, impulse buys, and even spending money that should have been designated to other areas. With plastic a lot of this information is gathered well after the purchase, and by that time it is usually too late.
Spending cash constantly reminds us of the value of a dollar. Buying a fancy $4 Starbuck’s coffee on plastic can become so much of a habit that we become oblivious to the fact that real money is changing hands. The consumer industry would love to make consumption as much like a video game as possible, they benefit when you forget what your money is worth. In this day and age with direct deposit, automated payments, and credit cards it is possible to earn and spend money without ever physically seeing any of it. It even kind of sounds surreal when you describe that way.
Spending cash hurts. This may not hold true when buying a pack of Wrigley’s Juicy Fruit, but it sure does when filling up an SUV at Sunoco. Psychologically, parting with cash is much tougher than swiping a card.
Paying with cash is faster. No waiting for signatures or authentication. Hand over the the cash, get some change, and you are done. Stores have ‘Cash Only’ lines for this reason.
A fringe benefit is that paying with cash can put more profit per purchase in the store owners pocket by avoiding the credit card company fees. For me I would rather give a little mom and pop shop some extra profit than line the pockets of the credit industry. This point maybe nullified if spending cash significantly lowers the overall spending in a given store.

Drawbacks of Spending Cash

Convenience, Convenience, Convenience. The hassle of finding proper ATMs, making sure you have enough for large purchases, and saving receipts to track your purchases makes using plastic make more convenient. Spending cash seems annoying, but I will see how annoying it is during the cash only experiment.
Security. Lost your wallet? You can probably kiss your cash goodbye. Plastic affords you extra security measures that cash just can not offer.
Credit card rewards. If spending cash proves to cut my spending by more than 1%, rewards won’t matter. I included it because rewards are where the credit card users get all worked up. They get quite passionate about their rewards. Free money, right? I suspect the credit cards companies are armed with more information than the consumer. We will see if credit card companies have done a good job blinding us with rewards.

» Filed Under Cash, Credit Cards, Experiments, Psychology of Debt

Save Yourself 18%? Cash Only Spending Experiment

Posted by The Happy Rock on June 27, 2007

With June drawing to a close, I wanted to lay out the plan for the cash only spending experiment in July. I talked about the impetus for the experiment in the ditch the credit card and save post.

Using the scientific method here is the break down of the experiment :

Goal : Test whether spending only cash will save 12-18% as Dave Ramsey suggests.

Hypothesis : Spending only cash will reduce the amount of money consumed in a given month.

Control : Currently the plan is to compare the cash only spending to the average of the previous 2 or 3 years of July spending, which was 95+% on credit and debit cards. I need to dig into the numbers a little more to find the baseline numbers that will account for things like vacation and other irregular spending. I may end up using an average of the all the summer months, but I will flesh that out in a later post.

Experiment : Spend only cash from July 1st to July 31st. This includes everything except bills which will still be paid online or by check for lack of a cash alternative. At first, I thought I would still pay gas with plastic, but ultimately that defeats the purpose of the test. Shelling out 50$ cash to fill up will have a physiological impact.

I do not plan to budget at all, since we only do post spending tracking as it is. I want to try and replicate previous years spending conditions as much as possible. The plan is to have plenty of cash on hand to spend on anything we want, just like we did with credit and debit spending. We will save all receipts and I will enter them into Microsoft Money every weekend.

Analysis : I hope to show the effect that spending cash will have on different categories of spending and on the overall budget.

Post Experiment : I will report status throughout the month and then final wrap-up in August. If the experiment proves successful and doesn’t need a follow-on month, we will move to a cash only envelope system to test the added benefits of the extra planning and control.