Coming up on the end of June, I’m finding myself about to begin my 6th month of budgeting. For the most part I would say so far, so good however for some reason I’m a little puzzled by one of my envelopes which has been totally blown away in May and June.
The culprit: Food
And when I say “Food” this encompasses anything I buy at the grocery store so trash bags, etc. also fall into this category. I know to some that will seem crazy, but trust me – I am NOT a detail person. I can handle the details, but I hate them, so I try to stay in line with what I’ve heard Dave Ramsey say time and time again and I “KISS” everything I can (Keep It Simple Stupid). My feeling is that I have enough balls in the air, so the more of them I can consolidate, the better.
Anyway, the question has been WHY. Why has my food budget gone so terribly wrong these last 2 months when I was able to keep to it so well February through April? True, it could be in part to the increase in cost of some food items due to rising gas prices, but I suspect it’s actually more simple than that. I think this is because May was when I stopped paying for my groceries in cash and instead started using my debit card again. In fact, May is when I moved all of my “cash” items back to the bank and was aiming to only use my debit card.
The studies done by Dunn & Bradstreet as well as Citigroup indicate that consumers spend 18-20% more when using plastic than when using cash. That paying for things with actual cold, hard cash registers as pain in your brain receptors, but using a plastic card registers nothing. Apparently using a debit card does register a little pain, but apparently not enough to cut down on the amount you spend. Hm.
So, just for kicks I’m moving back to the cash envelope system for this month with items like Food and will just see what happens. I’m still not finished June so I need to try and get creative for the rest of the month. I wonder what cardboard tastes like…
God Bless on this journey to use cash! We are interested to see if that saves some money and proves the statistic right.
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I don’t get it – I mean so say if your food budget is $100 – than that’s just a cold hard fact no matter how you pay – so if you use cash you use $100 in cash, if debit than at the end you know you can’t spend more than $100 on your debit – so what am I missing?
Yes, seems simple in theory, I agree. However, I have found myself approaching food shopping a little differently when NOT using my cash. I’m just a little more emotionally attached to my cash… For example, if considering getting a snack at work, but getting a snack would mean breaking a $20, I’m probably not going to break a $20 for a $2 snack. I hate breaking twenties. And then when I’m actually AT the grocery store and getting stuff, let’s say I have $50 left in my food budget for the month but the items I get comes to $54. When using cash, I would put something back, or I would be adding as I went to be sure I wouldn’t go over my $50. With my debit card, I’m more likely to just pay the $54 and figure I’ll move the additional $4 from another envelope.
I could be wrong about the above, granted. But what I do know is that I didn’t break my food budget AT ALL for 4 months and then suddenly I did 2 months in a row and the only thing different was the WAY I was paying.
Let’s call it a sociological experiment. I will report my results at the end of July and we’ll see.