Wednesday, 9 January 2013

Cash free month challenge

I recently completed my annual spending summary, where I chart what we spent by a set of categories over the last year. We weren't very frugal in 2012 because we both had jobs for the first time ever! However, this needs to change in 2013 with our imminent house purchase!

One of the most interesting sources of spending was that the top three spending categories were:

1. Rent = 27% - good job we are moving then!
2. Groceries = 12% - ok, so we like food.
3. Cash = 8%

OK, so number 1 and 2 are not that surprising. We could definitely do with paring down our groceries, and luckily with buying a house, rather than just rent we will be paying for equity as well (although for the first two years 50% of the money we put into the mortgage will be interest, but gradually the situation will become better).

However, CASH at 8% of our annual spend? I could NOT believe that!

To put this into context, I aim to spend as much as possible by card, simply because it makes it easier to track things. I look at the statements for Mr PTC and myself at the end of the month and enter the numbers into a spreadsheet via categories.  So cash should be a tiny tiny tiny bit of our spending, related to places and purchases where it is easier to pay by cash than card.

I should also point out that I take out the majority of the cash in this particular house! And spend the majority of it. Worse still, most of it is spent on lunches, coffees and snacks at work! We can easily spend £50 some weeks on food between the two of us at work if I don't organise lunches. That is *a lot* of money!

When I realised this I had also just magicked away £100 that I took out in cash before Christmas. Sure enough there were very good reasons to spend that £100, but it is a lot of money to just vanish! So just after Christmas I set a little aim for myself to see how long I could go before having to get some cash out. I am pleased to say it has now been two weeks! Yesterday Mr PTC had to pay for parking in town because I didn't have cash, but other than that I haven't actually missed it. Instead I have focused on making lunch to take to work (I need to empty my freezer asap), and whenever I fancy a coffee and cake in the afternoon I remind myself that first I will need to leave my nice warm cosey building, take a cold 5 minute walk outside to the cash machine and then finally get coffee. Its amazing what the threat of bad weather and dodgy hair does to your wallet!

So to continue in this theme I will try to make it to the end of January with NO cash! I'm quite sensible about card spending (OK I might retract that statement at some point), but cash can just be frittered away. Now if I want to spend I need to ask Mr PTC and deal with the frown and annoyance of him having to get his wallet out! Funny, that!

I fully expect to go back to cash, indeed a lot of the time it is necessary. However, I hope a cash free month will instil some frugalness in me that I apparently need!

Thanks for stopping by,
Let me know what you think... leave a comment or send an email to passthecaffeine {at} gmail {dot} com

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