I mentioned during February that I was struggling with our finances a bit. Being at home all of the time isn’t helping that, I am sure. March so far seems to be going much better; I feel much more in control and positive about our spending habits.
But, that can change so quickly. And because we are on a reduced income whilst I’m on maternity leave, I need to keep a close eye on all outgoings.
So, for April (to begin with!) I’m going to pay for various things only using cash. I’m going to use cash for the following items in our budget:
- all food spends – this includes takeaways
- petrol
- child related spends
- household items
This is the April Cash Challenge.
What isn’t included in the challenge are any spends we make on holiday. We are away for a week during April and so will (obviously) be spending money there. This is already planned and are not counted in this budget. But, if we get tempted by a sneaky takeaway, then that has to come out of the food budget!
Our budget? Well, I need to think about numbers based on our overall household budget. I haven’t broken down our budget for a while – I’ve become a bit lax on writing down every single spend – but I’m thinking of the following for the month:
- food – £250
- petrol – £150 – we’re away and will use the car more than normal
- child related costs – £100 – this includes formula/nappies/wipes/clothes
- household items – £50 – this includes household items/the cats/
I’m actually looking forward to using mainly cash for this. I think I’ll break this into weekly amounts and use that, as I don’t want to have that much cash on me at any given time. But, I think it will definitely be an eye opener. I’m going to try and make some DIY cash envelopes to keep my different categories in. I’ve been watching some videos on YouTube about them and it doesn’t seem too tricky.
So here goes! Wish me luck.
What do you think? Does anyone want to join me? I’d love to hear about your progress!
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Good luck with this challenge! We have done this in the past and it definitely helps focus your spending and stop you whipping out your card for a sneaky £10 grocery top up.
Just make sure you take the cash with you instead of leaving it safely in its envelope at home like I did on more than one occasion! Doh!
I think I might join you but will have to wait until May as April is likely to be all over the place with DD2 home from uni. My budget always goes out the window when she is about.
I always use cash for food shopping, and it definitely helps me think differently about spending!
But I really need to be more strict and keep an eye on how much I’m spending over the month (I usually get to the end of the month, add up my receipts, and get a shock!) so cash envelopes sounds like a good idea, which I might try in May. Good luck 🙂
Two thoughts …
Firstly you’re struggling financially and yet still planning on buying takeaways!! Why not cut back on expensive meal options and learn to cook your favourite dishes instead – far cheaper and can be healthier too.
Second thought is it’s great to see where your money is going by spending cash only – but you miss out on cashback and buyer protection by not using cards.
We’re not struggling financially – where does it say that?
You can’t get cashback on grocery shopping plus we’re not spending much on other things. We do use cashback sites when we can 🙂
Your article contained the following which led me to believe you were looking to stretch your budget to the maximum, especially given the nature of your blog / site about saving money …
“I mentioned during February that I was struggling with our finances”
“because we are on a reduced income”
“I need to keep a close eye on all outgoings”
On my road to FI I noticed my biggest discretionary spend was takeaway food – I cut that out and learned to make my favourite dishes (prawn dhansak), and when I did order food I followed a mantra of “one dish less”. That mantra helped to save the pennies and also the calories so was a win/win!
As to cashback you most certainly can get cashback on grocery shopping with most cashback credit cards – where you might struggle is if you’re using a cashback debit card associated with a current account. The cashback credit card I use pays 1% on ALL spending except cash advances – and that’s free money that I personally don’t like to say no too.
I currently use the Asda credit card for my grocery shopping in, guess, Asda! 1% cashback.
However I also think for the sake of 1% of say £300 (that’s a mere £3) it is worth doing the cash envelope system occasionally. It really focuses your mind and makes you feel very much more in control.
1% may be free money. But if you end up spending more because you don’t have as much focus on your cash that month then it’s not free money.
It’s a good challenge to do for one month or whenever you feel you need to refocus your money mind.
Then you can revert to using your 1% cash back credit card – which of course you pay off in full at the end of the month (or even during the month if you like).
Exactly … free money!!
Use that card for all your spending, especially now fees for using a credit card have been banned, and it soon adds up to what can be £100s a year.
Of course it’s not for everyone, some people enjoy using real cash and the ability that has to apply a handbrake on spending, some people don’t like free money I guess.
But I was responding to comment that stated you can’t get cashback on groceries – that is factually incorrect as both you and I are agreeing on.
Ha! I think everyone likes free money! You rightly point out that using cash enables you to apply the handbrake on spending (nice term by the way!). Sometimes using that handbrake is a great tool to make the most of free money over the longer term, by re-setting ones money mindset.
I’d love to use my 1% cashback credit card 100% of the time but I know myself too well so inter-space its use with debit card and a yearly cash month (when daughter isn’t home from uni upsetting my financial plans!)
You sir, are obviously more disciplined than me!