Early last month, I decided to leave my credit card in my wallet throughout November. Over the last few years, I’ve been using a rewards credit card to pay almost all of my day-to-day expenses. I never pay interest charges because I always pay my credit card in full before the due date. I buy what I buy, and the form of payment is irrelevant. If I spend $30 on music with my credit card, I would spend just as much with cash. The bonus cash back provided by the credit card would effectively leave me with more money once the points are cashed in.
I spent less in November than I have since October 2006. Before October 2006, the most recent month in which I spent less was January 2005, the earliest date for which I have data in Quicken.
My biggest concern when starting this experiment was my ability to track everything spent with cash. I was careful to collect my receipts and record transactions in Quicken within a few days.
The use of cash was not the only aspect of my spending that resulted in a month with low expenses. I spent a week with my family in California, and I had very few expenses during that time. Without working during this week of vacation, I did not purchase my lunch every day, nor did I need groceries for other meals. I also had no restaurant expenses during that time.
With an entire week of practically no expenses, I can’t completely call the experiment a success. I left a few recurring expenses, such as a monthly charitable contribution and my cable television payment, on the credit card. It would have been a hassle to change my settings. In these cases with set expenses, there is no opportunity for me to automatically spend less just by using a check or a debit card rather than a credit card.
Since November was mostly inconclusive, I will continue this experiment through the end of the year. December should be a month with more expenses, particularly due to holiday gift giving.
Updated June 24, 2016 and originally published December 1, 2008.