Money Talks, So Should You

Q&A: Pay cash to meet your savings goals

Mechel Glass
by Mechel Glass, Dimespring Contributor  (@CredAbility)

A friend lost his debit card this past weekend, forcing him to pay cash for all of his out-of-pocket expenses while he waits for a new card from his bank. He discovered that the act of handing over cash for every single expense was a minor jolt, a reminder that he spends more money for everyday items than he remembered, and that he sometimes spends it needlessly on small items. It’s money that he could be saving.

READ: 3 painless money management tips

But using cash instead of using a debit card is one good way to examine our spending habits. If you are having trouble meeting your monthly savings goals, or saving any money at all, I would recommend a couple of actions.

First, cash a check for $50 or $75 to pay for your expenses for the week. See how long this amount lasts and write down each expense to determine how you are spending your money and the purpose of each expense. This exercise will enable you to examine your spending habits, where you can reduce or eliminate expenses and set a new savings goal.

For example, we all need to spend money on transportation. But have we become so used to paying $3.50 - $3.75 per gallon that we’ve stopped paying attention to the total amount we spend each month? If you are spending $50 a week on gasoline, or $200 a month, can you find ways to reduce your driving to save money? Even more important, is the car you own the right one for you and your family?  If you have a large car or utility vehicle, would it make sense to get a smaller car?

READ: 4 tools you can use to lower your debt

Next, pay cash for everyday items you consider necessities, including food. Track the amount spent and examine if you are within your budget. After that, determine if you’ve spent money on items that were not necessary, such as fast food and beverages. Many people know that they spend money on these discretionary items, but they are often surprised at the amount.  

Of course, it’s not practical to pay for all expenses by cash. You should continue to make your monthly payments for mortgage and car loans and utilities by check or online bill pay.

But if you find that paying cash helps you budget better, try to use cash as much as possible over a 30-day period, once again tracking spending on all items. I’ve discovered that it’s easy to spend $5-10 every day on snacks, coffee, yogurt and other items simply out of habit. But tracking our spending for all of our expenses will help establish new habits and eliminate unnecessary spending.

READ: From spender to saver in three simple steps

Everyone has savings goals, whether it’s to establish an emergency account, set aside money for a child’s college education or your own retirement.  If you can’t seem to meet those goals, start by establishing a solid budget. I’ve set up budget guidelines that anyone can follow, so if you need help, please visit the CredAbility calculator page.

Once your budget is in place, use cash for 30 days, track your spending and I’m confident that you will find new ways to save money.


Mechel Glass is vice president of community outreach for CredAbility. She is responsible for coordinating community outreach and financial education activities across the agency’s regions and developing new education programs for both classroom settings and online. Glass, a U.S. Army veteran, is also co-author of “The Veteran’s Money Book,” scheduled for publication in April 2014 by Career Press. The book can now be ordered on