Taking a Bite out of Food Spending: The Cash System

Pony asking "do I smell sugar?" sugar free dietToday is day 8 for our family steering away from sugar. That’s right, cake, cookies, brown sugar in oatmeal, ice cream and our jackpot of Christmas candy is out. The only exceptions are honey that can be used in a small amount in tea or oatmeal and, if desired, one square inch of dark chocolate. For a total of 30 days, we are floating this sugarless lifestyle challenge. I have even been recording the experience on a new little blog called “Sweeter Life with Less Sugar.

Managing food expenses

Health is something that has to be actively managed and sometimes adding a little gimmicky incentive can help keep goals on track. Not grabbing a cookie at a party or adding flavoring to a latte is a moment by moment challenge–do you see how I am tying this into managing finances? Food seems to be in a bitter fight to become one of our highest expenses and it was time to tame its almost out of control nature using the cash system.

“Keeping in mind your financial priorities, it’s time to create a plan for your savings and spending. Often the reason people hate budgets is because they’re too rigid to follow or time consuming to set up, but there are lots of different ways to create a budget, ranging from the zero-based budget that accounts for every penny and the classic envelope budget method of divvying cash in envelopes to using webapps like Mint for budgeting.” – How to Set Up and Streamline a Shared Budget by Melanie Pinola, LifeHacker 

The classic, “envelope budget” method is simply creating a budget, taking out that amount in cash and putting it in envelopes labeled with the spending category. Once the money is gone, it is gone until the re-set date. Simple? Well, maybe if you like math …

“The anticipation of doing math problems lights up pain networks in the brain for people with high levels of math anxiety, according to a new study.” – Math Anxiety & Pain by Megan Gannon, Huffington Post

Our first attempt at the cash system for our budget was a flop. I will happy testify to the pain factor which goes to tell me that sometimes going all out on a new plan is setting myself up for a sprint into a brick wall. Starting with something tough, but not impossible to achieve like removing sugar from our diets is easier to tackle. This time around trying out the envelope cash system, we focused just on food. Instead of physically placing money in their little envelope homes, we distributed the cash between the two of us. I somehow defaulted to getting the long straw as I go out more and tend to do the big shopping trips. We are going on a month of using this method of managing our wild food spending and, surprisingly enough, at the end of each week we have a good chunk of leftover cash.

Thinking this might be an interesting experiment for you to try? This is a good time to go visit Mint to see what your past average spending on food was.  Include restaurants, groceries, snacks, and of course coffee and break that down into weekly amounts. If you haven’t already add this expected weekly average into Claratii. Pick a re-set day for the week, ours is Saturday and go to the cash machine to start your experiment. My 30 day challenge to you is keep notes on how the experience goes.

Here are a few questions I would love to hear your feedback on:

  1. What does it feel like to hand over cash vs your debit card for food purchases?
  2. How do you handle purchasing household goods? (Separate transaction or do you pay in cash and reimburse yourself?)
  3. Have you used the enveloped system before and are trying it again?
  4. How have you used Claratii to make changes in the way you spend or plan?
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