5 lessons from a cash-only week

Will paying cash change my spending habits? What I learned when I could only pay with cash for a week.

Firstly, an admission. I never – ever – have cash. I’m that annoying friend who doesn’t have cash to cover her share when spitting bills, that colleague who borrows money to chip into the birthday collection, the parent who gives her kids an IOU for their pocket money.

It’s not that I don’t spend money – believe me, I do – but my life is an endless cycle of direct debits, bank transfers, credit card and PayPal payments, and Tap and Go, with the odd dash to the ATM when actual cash is required – but even then, I’ll only withdraw enough to cover the expense itself.

While living cashless can be inconvenient at times, my rationale is if I don’t have cash, I can’t spend it. Which is, of course, highly dubious, given technology has never made more convenient, or easier, for us to be parted from our hard-earned money. So what lessons can we learn from a cash-only week?

Does cash really burn a hole in your pocket?

I wanted to test my theory to discover if having to pay in cash would actually change my spending habits, so I committed to a cash-only week.

The first question was how much cash to withdraw. The fridge and pantry were stocked, and the bills on direct debit, so I figured I’d only need cash for ‘incidentals’ - but I honestly had no idea how much these would be.

This led to my first lesson: I’m so removed from cash that I’ve lost touch with how much things actually cost. In the end, I withdrew $500 - and couldn’t remember the last time I had that much cash in my wallet.

What I learnt from my cash-only lifestyle

1. I’ve lost touch with what things actually cost

Much in the same way as I didn’t know how much cash to withdraw for the week, when I was faced with some expenses I had no idea how much they would actually cost.

For example, there was a gap payment owing between the cost of the service and my private health insurance when I took my daughter to the dentist and also for an unscheduled trip to the physiotherapist. I honestly had no idea how much these charges would be until the words came out of the receptionist’s mouth. (They turned out to be $70 and $97, respectively, in case you were wondering).

Perhaps even more revealing was when I got a regular prescription filled. Despite this being something I buy every 6 weeks, I usually Tap and Go to pay for it so I honestly didn’t know how much it cost.

2. I’m a lot more casual about money than I used to be

Not knowing how much that prescription cost was a lightbulb moment for me. I realised that when I pay using Tap and Go I rarely even bother to check the amount the sales assistant has entered anymore, especially for small payments.

Given it’s easy enough to accidently enter an extra zero, turning the $8.50 into a $850 expense – something I’d rather pick up at the register than later on when I realise I’ve got no money in my account – I’ve decided not to be so cavalier in my attitude to small expenses in the future – especially when paying by card.

3. There are some things you can’t pay cash for

Sometimes cash isn’t king. Despite my best intentions there were things I couldn’t pay for using cash.

Firstly, getting public transport to work required a payment by either Opal card or credit card – there was no option to use cash.

I also had to buy some tickets for my daughter’s upcoming ballet performance and the only way I could do this was online via credit card.

Conclusion: In today’s modern world, living a pure cash-only existence would be very hard.

4. It’s harder to overspend when you’re paying with cash

I’ll admit, I had one fail during the week – a mid-week online clothing update. It cost me $300. While I did cull my online basket down from $500, would I have walked into a shop and spent $300 in cash in a one-off shopping trip? Possibly not.

What this taught me is that it’s much easier to overspend when spending ‘invisible’ money. I justify this by reminding myself how much I hate physically shopping for clothes and telling myself I can return anything that I don’t like or doesn’t fit, (free of charge and for a full refund), but we all know the likelihood of this happening…

Having to physically hand over cash for lunches, snacks and coffees at work strengthened my resolve to bring food from home more often and confirmed my conclusion that I’m more conscious of what I’m spending and less likely to overspend when paying with cash.

5. The cash I had dictated what I did for the week

In my student days I’d withdraw the cash I needed for the week and every dollar would be closely accounted for. If I couldn’t afford to go out with my friends, I’d stay home. This week was a little bit like that.

I made decisions for the week based on the money I had, rather than deciding what I’d like to do, and then working out how to pay for it. I found there was a lot more incentive to regulate my spending when I could see the cash literally disappearing before my eyes.

So, it turns out that my theory was completely wrong:  I’m actually less likely to spend money when I have a wallet full of it, as having cash gives me greater visibility over what I’m actually spending.

Other ways to track your spending

If carrying around a wallet full of cash isn’t practical for you, there are other ways you can get greater visibility over where your money goes. If you’re an AMP customer you can log into My AMP and use our Money Manager tool, which allows you to see your AMP and non-AMP accounts in the one place, with your transactions categorised automatically. 

AMP’s Bett3r account may also assist you in staying on track financially, as it enables you to track your bills, set up savings goals and know what’s safe to spend.

And if you’d like to try a cash-only week (or longer) yourself, it’s useful to keep notes on your experience to help you identify your spending habits and priorities.

Good luck!


Michelle Bowes is a financial writer in the AMP content team.

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