Saving money with cash and a $5.00 money saving challenge | Little House of Four: Saving money with cash and a $5.00 money saving challenge

Tuesday, February 3, 2015

Saving money with cash and a $5.00 money saving challenge

Over a year ago, I did a no spending month and cut our monthly budget drastically to see if we could live on less.  It was an eye opening experience that forced me to make a few sacrifices and get creative with meal planning and entertainment.   Hey, not buying coffee creamer because we needed milk or drinking off brand coffee because it was cheaper was a sacrifice for this coffee loving girl!  Strange enough, after just a few short weeks, I was getting used to our new budget.  I've always wanted to do another no spend/budget tightening month, but when my co-worker mentioned we should try it in February, I just wasn't ready to commit.  Instead, I thought about doing something else that I've done in the past, a $5 challenge!  For this challenge to work, you have to use cash, yes I said CASH!  Not credit cards, not debit cards, but cash.

You've all heard of the envelope system, right?  Whether you want to go to an all cash system or get your spending under control it's a great budgeting tool.  About 2 years ago, I switched from using my debit card to using cash and it's completely changed my spending.

So, why am I writing about this?  Well, I strongly believe in using cash and know it's helped our family save money and be more cautious about our spending.  I also think it's important to share what has worked for me and my family in hopes of helping others.

So, how exactly do we save with cash?

After our paychecks are deposited into our checking account and a set amount of money has been automatically transferred to our saving accounts, I withdrawl cash for my weekly spending.  That cash gets divided into 5 categories (Gas, Groceries, Katie weekly, Pets, Gifts) and put into my cash envelope wallet.  The money that remains in our checking account gets used to pay our monthly expenses (mortgage, BGE, Verizon, etc.)

When I go to the grocery store, I pay with cash.  When I get gas, I use cash.  When I want a coffee drink at Wawa, I use cash.  If the dog or cat need food, I use cash.  If I need to buy a birthday gift, I use cash.  Don't get me wrong, I still use my debit card for some household purchases, but the majority of our household expenses are paid for in cash.  Money that's leftover from one week gets carried to the next week and so on.  For instance, I don't buy pet food each week, but when it's needed the money is already set aside and I don't cringe at spending $55 for a bag of food.  When 3 birthday parties pop up in the same month, I'm already prepared and it doesn't break the budget.

Here's where I challenge you all to the $5.00 money saving challenge!

Every time a $5.00 bill comes into your hands, put it in a jar or envelope.  This challenge not only helps you save money, but also makes you think twice about your purchases.  This is my second time doing the challenge and just as I did before, the money will be used as extra spending money for our summer vacation.  What do you think?  Will you take on the challenge?   It may seem daunting not using $5.00 bills, but you would be surprised how quickly they add up and how easy it is to forget you even had them.


  1. Absolutely BRILLIANT! Will definitely be trying this!

  2. This is a great idea, Katie! After all of the holiday madness, I definitely need to put the smackdown on spending. :)

  3. Good idea... I have used only cash for years for groceries, household items, etc.... and we live quite frugally with a large family and have for many years... but we keep getting better at it. :) We have never done the $5 challenge idea, BUT we have saved coins... in jars... for vacations, daytrips, etc... and that adds up nicely as well. Thank you for the idea. :)

  4. This is a great idea! I've always wanted to try a no-spend month, and this $5.00 challenge might be a good way to ease into something bigger like that!

  5. Lots of great ideas. I am paid hourly and my paycheck isn't consistent. I have a few lean months a year where I really have to watch my budget. My gas station gives a cash discount. When I use cash at the thrift shop, more money goes to charity. Cash is a great idea.