Real Food on a Real Budget: Using Cash

getting cash from a machine

This week I will be running some excerpts from my new book, Real Food on a Real Budget: How to Eat Healthy for Less. They will be short selections from a few different chapters, just to give you an idea of some of the contents.

Using  Cash

Taken from Chapter 1: Working With a Budget

Once  you  have  determined  what  your  monthly  budget  ought   to  be,  or  how  much  you  have  to  work  with,  here  is  my  biggest piece  of  advice  in  sticking  to  that   budget:  USE  CASH!

I  know  the  reasons  that  people   prefer  not  to  use  cash. They  don’t   want  to  carry  that  much  around  in   their  purse. They  prefer  to  put  in   on  a  credit  card  that  earns  points   and  then  pay  it  off. They  make  all   of  their  expenses  on  debit  and  then   just  keep  track  of  it. It’s  more  work   to  set  it  up,  take  out  the  cash  at  the beginning  of  the  month,  and  stick  to  the  system. It’s  embarrassing  to  pull  out  an  envelope  full  of  cash  when  you’re  in  a   busy  line-­up  at  the  grocery  store. It’s  _______  (insert  your  own   reason  here).

Regardless  of  your  reason  for  not  wanting  to  use  cash,  here  are   the  reasons  that  I  find  it  the  best  way  to  stay  on  track  with  my   own  grocery  budget:

It  is  visible  and  very  tangible. I  can  see  exactly  how  much  I   have  left,  and  I  feel  it  when  I  pull  those  bills  out  to  make  a   purchase  and  notice  how  much  smaller  the  remaining  stack  is. It  keeps  me  very  conscious  of  what  I  spend.

It  prevents  me  from  making  impulse  purchases  that  I  really   don’t  have  the  money  for. Trust  me-­  it  is  much  more  embarrassing  to  not  have  enough  cash  for  the  food  you’ve  put  in   your  cart  than  it  is  to  simply  count  out  the  correct  amount  in   front  of  curious  onlookers! When  I  know  exactly  how  much  I   have  to  spend,  I  make  sure  that  I  am  keeping  track  of  what   goes  into  my  cart  before  I  get  to  the  checkout  line.

Even  if  I  forget  that  I’ve  spent  more  than  I  thought,  the  cash  is   no  longer  there  and  I  cannot  accidentally  bust  my  budget. This   is  something  that  would  often  happen  to  me  when  we  used  a   debit  card  for  all  our  purchases. The  smaller,  quick-­run-­to-­the-­store  kind  of  expenses  would  slip  my  mind  when  I  was   calculating  how  much  money  I  had  left  to  spend,  until  it   actually  came  time  to  add  it  all  up  at  the  end  of  the  month  and   I  would  realize  that,  once  again,  I  had  gone  over  budget. With  cash,  if  it’s  spent,  it’s  spent.

It  forces  me  to  really  evaluate  each  purchase  as  I  go  to  make  it. Sure,  that  packaged  spaghetti  sauce  would  be  nice  and  easy,   but  for  the  same  amount  I  could  purchase  tomatoes  and   tomato  paste  and  some  veggies,  and  make  a  much  larger   amount  of  sauce  that  would  be  more  nutritious. And  do  we   really  need  those  store-­bought  muffins  or  could  I  easily  whip   up  a  batch  of  my  own  (but  minus  the  rancid  oils,  white  flour  and  sugar,  preservatives,  etc.)  and  have  a  fun  morning  with   my  5  year  old? Those  out-­of-­season  peaches  for  $3.50  a  lb  in   May  might  look  awfully  tempting,  but  I  could  buy  a  whole  lot   more  seasonal  rhubarb  and  strawberries  for  the  same  amount   of  money.

It  helps  me  to  set  aside  money  for  larger  purchases,  such  as  a   side  of  grass-­fed  beef  or  buying  organic  grains  in  bulk  or   purchasing  berries  in  the  summer. By  going  through  my  cash   at  the  beginning  of  the  month  and  separating  it  for  savings,  for   my  raw  milk  share,  for  my  co-­op  order,  and  then  only  spending  what’s  remaining  on  other  groceries  and  produce,  I  can   ensure  that  I’m  actually  using  my  budget  the  way  that  I  plan  to   rather  than  running  on  auto-­pilot  and  finding  that  I’m  coming   up  short  at  the  end  of  each  month.

Do you use cash for your grocery budget? Why or why not?

Post taken from my newest book, Real Food on a Real Budget. Find out more about how you can save money and still eat real, whole, nourishing foods!

Image by francoiskarm

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  1. Since the onset of our marriage two years ago, we started implementing Dave Ramseys money principles. We have since then used cash for groceries and cash envelopes for other things as well. We have found this very helpful in all the ways you shared above!

    I love your website Stephanie…thanks for the things you share and bringing Glory to God!

  2. We have been using Dave Ramsey’s cash system for the past five years and will NEVER go back!! Although we have gone over budget a few times, it definitely helps keep us aware of what we spend. Not just our food money, but all of our money. We feel that our money is not ours, and that we have an opportunity to steward our money well and using the cash system is just one small way to do that! I’m very interested in reading your book since I struggle with the cost of natural or organic foods, and in turn, our food budget struggles!

    God Bless!
    .-= Jill G.´s last blog ..April No Eat Out Month Finale =-.

  3. when i saw the title of your post, i almost laughed out loud. ove the last six years (our marriage) my hubs and i have often gone back and forth about this. i think i should use cash, as i’m almost positive i’ll spend less (or at least stay within budget); he prefers me to use credit for the points. awhile back, i decided it was an issue of submission for me to stop pestering him about it. and recently, he brought it up. funny, huh?

    i’m really excited about your book and plan to get a copy (hoping for a mother’s day gift!). do you talk at all about how to set a real food budget? that’s one thing i’d find helpful. if you don’t discuss it in the book, could you discuss it on the blog?

    we currently spend rather little for a family with two small kids, but we also have a modest income…we’re in the midst of transition, having moved to a new state a month ago, so it’s a good time to re-evaluate what we spend to adjust as necessary. it seems to me that if we’re really going to eat whole real foods, we do need to increase the budget, but i want to be wise with our resources. not sure if the increase is necessary and i’m looking for some guidance in that area.

    maybe it’s all just personal (whether you can garden, have access to farmers, etc) and you do what you can with what you can afford?

    thanks for all your hard work on the blog and book! your blog was one of the first i stumbled on when we started this real food journey about six months ago. i appreciate your heart to honor your husband and manage your home well. it really encourages me!!
    .-= katherine´s last blog me in…atlanta? =-.

    1. @katherine, Yes, I definitely spend some time talking more specifically about how to set your budget. Of course, the kind of variables you mentioned really do affect things (what you have access to, and also family size, town or city, etc.). I share how I set mine, and I also give some general guidelines and questions to discuss as husband and wife. It also does come down to what you can afford and feel comfortable with, and I think we each need to prayerfully consider what is the right amount for us.

      Thank you for your sweet comment!

    2. @katherine,
      I see a couple of options to think about. You could see if he would be willing to let you try a month on the cash (for food budget) method. Perhaps the money you save by not going over budget is worth more than the points you would earn? (statistics show that one spends less with cash than when using a credit card) The flip side is, if you are just setting your budget and not knowing what to set it at, this could backfire a little bit since sometimes it takes a few months to learn how/what to budget for.

      Another option (might want to try this while you’re finding out how/what to budget) is to simply write your budget on a card/paper and deduct what you spend as you spend it. Use this card as your cash. Yeah, I know it’s not the same as “when it’s gone, it’s gone” mentality, but it is a step in the right direction and lets you see how much you have left over at a glance. This may very well work beautifully for you (if you are strict in making sure you don’t go over) and be a win-win for you and your dh.

  4. We just finished our Financial Peace course last week. For the first month of our budget we used cash. I liked doing that for all the reasons you mentioned. My problem was when i would go someplace like Target where I would always purchase things for multiple categories like food, toiletries (I like keeping this separate from food), and gifts. The easiest way to handle this at the store was to pay all out of one category, but when I got home it was kind of a mess to sort out the money, especially if I didn’t have the exact bills in the envelope I needed. This past month I decided to use the debit card. I created a master spreadsheet that will keep track of spending in each category and show me what there is left to spend. It is not ideal, but it is working a lot better for me. I might eventually go back to cash for the easier categories that don’t usually cross-over like entertainment and restaurants.

    1. I have handled the “multiple purchase” in 2 different ways:
      -we have a “household” category that includes both grocery and household purchases such as toiletries. this is particularly helpful if you make a lot of your own toiletries (like i do) from kitchen ingredients.
      -at the store, while placing things into the cart, I put food in front, and household in back. then while paying, i ring up the items in 2 (or three) different amounts- grocery, household (gift sometimes). this really only takes 1 or 2 extra minutes, and works beautifully!

  5. OK, my biggest question about using cash is that my food expenses seem to be seasonal. I spend a ton on produce during the summer, but I eat out of my freezer during the winter so I spend less then. I thought it would balance out better, but I still tend to be over budget. How do you plan for that? Or do I just need to get your book.

    1. @Ann,
      I would try to set aside a certain amount during the winter to be used specifically during summer. Or decrease the budget in winter and increase it during the summer. If I didn’t have much wiggle room to work with, I think I would opt for keeping the budget the same year round but allocating a certain portion during the winter to set aside to help with the summer (being as I wouldn’t have much saved up for the summer if I started right now, I would simply up my budget as much as I could for the summer and then adjust and start setting aside the $ when the time is right).

    2. @Ann, Yep, you just need to get my book! LOL!

      Well, one way that I get around that (because the same is true for me) is by setting aside money. The last couple of years I’ve found that I spend fall/winter saving up to buy more beef, and then by spring I start saving up for summer produce expenses. It also helps that I garden in the summer, so I spend less on produce then and put that towards buying fruit to freeze/can.

      You could also just purposefully bump up your winter budget a little bit more (even $20-30) each month, but don’t touch it. Put it directly into a special fund or envelope for the summer months, so that by the time you get there, you’ve got some extra and it doesn’t put you over budget.

  6. I use my visa for most everything but keep detailed track in my budget book. We’re disciplined and this works well for us. We never carry a visa balance and earn about $300 in cash-back which we get end of year and use this $ for our Christmas tree and extra Christmas groceries. We also save part of most months’ budget to those larger purchases: local beef, organic grains, etc. But this is a regular part of our grocery budget now – in fact, I want more and more of my budget allocated to these types of purchases and fewer of our dollars to the local grocer.

  7. If I’ve been to the bank to get the money(sometimes my bank is the opposite direction, we’re talking 10 miles one way opposite direction from where I started from), then yes….otherwise I use my checkbook and then adjust the amount of cash to withdraw. I don’t have a debit card or ATM card, so it’s the checkbook until I can get to the bank to get cash.

    I do confess that this last couple of months I’m using the credit card simply due to the fact that they are offering a really sweet deal on rewards points, it may be iffy if we qualify since we being extra careful to not “overspend.” So not going to overspend just to get this deal! I’m basically deducting what we’re charging (once we get home) from our quicken and then going ahead and paying for those charges about every other week. Since we’ve been getting away from the credit card usage earlier this year, I’m not liking this very much and definitely plan on going back to the cash method—so much easier!

  8. We use cash and LOVE it! I’ve been wanting my husband to go the cash route for years and years, but he wouldn’t listen to me. Eventually I got the Dave Ramsey books from the library read him some passages and he became hooked. 🙂 It just took me years and years to show him the light.

    It’s a great way to control the food budget, not to mention everything else! One month i hope to see a big carry over into the next month, but so far we basically spend it all each month. But it’s less than what i would do if I had to use debit or heaven forbid credit! When I see we have $10 left for the last week of the month, i know to spend it on milk only and not go to the store and buy milk and more with a debit.
    .-= Lindsey@ Mama Sews´s last blog ..a letter of love to my son =-.

  9. We’re trying to follow the Dave Ramsey stuff too…and switched to debit though. (However, a side note….we ran into problems with several places we buy online not being able to buy things without a credit card. So we HAD to get one again. I was also told its impossible to rent a card without one. I thought we had read in the book that you can use debit online…but apparently not everywhere. What do you do about this? I don’t have a lot of stores here so we have to shop online sometimes for things.)

    I’m curious as to how it would work for us to use cash. I have a bunch of excuses 🙂 LOL to fill in your blank in the post. We don’t have a bank nearby, and not around where I do groceries. Its on a corner of the main street in another town…busy lights, with big stairs to walk up! I’d have to find parking (really hard..then I’d have to walk a ways) and haul the kids out to get the money. (I think I’m whining now LOL). I wish they’d make a drive through bank machine around here!!!

    I also remember back when my mom lost all her grocery money for the week by placing her wallet down near the cash register as she was packing up stuff. She had us kids with her. It was horrible. I think she lost over $200 (well, it was stolen). So I am scared of that happening since I get easily distracted.

    But that said I do see how I would much easier be able to not be short the last week of the month with a cash system. The last week is always hard. Something to think about…..

    1. @Nola, Even though we follow Dave Ramsey stuff and use cash, we still own a credit card. We use it for online shopping or things like rental cars, when we can’t just use cash. Then we take the cash and put it into a credit card envelope, so that it feels like we just spent the cash and then we know we have the money to pay off the card right away.

      The way we do cash is that Ryan take all our cash out of the bank at the beginning of each month. Then he divides it up between our wallets. This way we get the money we need all at once and dont’ have to think about it later.

      If I ever felt like I had way too much cash in my wallet, I would just keep some of it at home in a safe place, and then bring the smaller amount out in public when I went out.

      And the last week is often still hard for me with the cash system, but the difference? I can’t go over! I just have to do the best I can, and somehow we always get by! 🙂

  10. I want to start using cash right away! Thank you for this article. I have heard the advice to use cash many times before, but this is very clear and encouraging.

    I have a question regarding the husband’s involvement! How do you budget in his spending? Do I give him an allowance? OR Forbid his spending? (haha) OR Simply guess what he’ll spend? What advice or ideas do you have for this? (My husband does not spend much, but if my goal is to strictly stay within a budget, I want to consider this factor.)

    p.s. I like the idea of Dave Ramsey’s “envelope system,” and here’s a really cute version:

    1. @Jessa,
      How does he feel about it? After you draw up your preliminary budget (for areas except for his), tell him what your goal is for having a budget, show him what you are thinking about and see if he is onboard and see what he thinks his amount should be, get his thoughts. Also keep in mind that budgets will need to be tweaked as you learn and that you can change your budgets each month if need be (it’s not set in stone).

      My dh doesn’t want a “strict” allowance for himself. But I know about what he spends a month, so I just go from there. It’s really not a problem for us. I also have a “grace” category (read about this idea on another blog). You set the amount each month and if your dh (or you or unexpected kids activities) happen to go over on something, well, there’s your “grace.” If the grace didn’t get used up, then I decide what to do with it, whether it’s held over to the next month or put towards debt or in savings. It’s easier to do this than fret over going over, taking out of savings or trying to tweak the budget to make it work.

      I need to go back and tweak our budget. I thought it would be good to micromanage what I spend(personal/hobbies), but that’s not working out for me. I haven’t been real strict and in some areas I need to start being more diligent in staying within my limits I have set. I basically have a budget for myself, kid’s commissions and household.

  11. We use cash too and have for a few years (thanks to Dave Ramsey,also). It makes a huge difference. On the rare occasion (a few times a year) that I can’t get to the bank to take out the cash and I use the debit card, I know I overspend. Not by a lot thankfully but I am just not as careful.

    Thanks fora great post.
    .-= Debra´s last blog ..And then there was…. =-.

  12. Stephanie,
    Yes, we use cash too and it has been one of the most freeing decisions we’ve made. We talk more often about money now and discuss how we’re doing throughout the month. We take out the amount we know we can use for the month on groceries, household items, personal items, etc. and put it in a small container in a safe place. That way, we’re not carrying it all around with us at any given time. That has helped me to avoid impulse purchases too because I don’t have that much on me at any given time unless I am headed to the grocery store for our monthly purchases.

    Great post and a wonderful reminder why cash is best!
    Thank you.

  13. Such good Dave Ramsey advice. We use cash but the one place I can’t use cash is with my Azure order and my CSA. Do you just leave the necessary amount in the checking account to cover these cost even though they are part of the grocery budget? Love you site!! Thanks you.

  14. I have felt so in control of our money since we started using cash. Luckily, our bank is on the way to my son’s preschool, so every payday I just swing by the bank and get our 2 weeks worth of money (he’s paid bi-weekly). @ Niina When we started our CSA, I just lowered the amount of money we take out for groceries by that much and left it in the account to write the check. Online purchases are still a problem for us, but I like the “credit card” envelope idea. Maybe we will try that!!

  15. My husband and I use credit for all purchases. I keep tabs on how much I spend on groceries each week and once I hit it I am done for the week.
    Why do we use a credit card for all purchases? Because we are in a rewards program and make our money work for us. We pay off our credit card every month without fail, which means we are careful what we put on it, but we also put large purchases such as our car insurance, if we buy new furniture, etc so we get the points. The money will come out of our savings anyway so we have the money in order to do this.
    The reward program costs us $25.00 per year, charged to our card in January. Last year we made $925.00 from our card (this is less the $25.00 fee we paid). When we cash in the points we receive in the mail gift cards good at Sears or Kmart. It usually takes about 1 week for these cards to come in.
    This past Christmas I was able to cash in $420.00 worth of points and was able to do most of our shopping for free at Kmart. I say “free” because these gift cards do not cost us anything. We literally make money using our card, and we’ve been doing this for almost 5 years. It only makes sense that we make this card work for us instead of us working for the card.
    We have no annual fees except the one $25.00 fee at beginning of year. We do not pay interest as we pay off amount each month. Our card literally pays us for using it. We’ve never paid interest or had this cost us in any way.
    When my husband found out we could literally make money just by using a credit card for all purchases, he jumped at the opportunity. Even if I just spend $2.00 he wants it on the card. I buy all food, gasoline, and other items on this card. We also buy large purchases with this card.
    In return, I have not had to pay cash for shoes for a few years. I am able to do Christmas shopping on the cheap. And I am able to also shop year round for Christmas and other things with this money. I cash in 2-4 times per year.
    We have a large family (8 kids, sons and daughter in laws, 15 grandkids) so that we have 29 people we buy for for Christmas. The use of this card makes Christmas fun around here without busting the bank. We go through the bill each month and it is a good way to see where and how we spend money.
    This method works for us.

  16. I am curious what you and your readers would say a monthly food budget amount would be for a family of four who want to eat real and organic food? $500? $700? $1000? I feel really overwhelmed with the cost of healthy foods and don’t know where to set my budget. I am curious what others spend. Thanks!

    1. @Sarah, That is such a tough question because the answer is really “it depends”, which isn’t very helpful.
      I will tell you that I feed our family of 5 (my kids are almost 2 up to 6 1/2, and eat more than I knew that kids could eat!) in Canada for $450, although we are experimenting with upping it to $475. We eat fully real, whole foods and probably more than 70-80% organic or uncertified but organically/sustainably grown.

      I know of several other frugal real foodies with 2 young kids (in the USA, not Canada) who eat in the realm of $300-$450. Some that are more purist in what they buy or with more/older kids might be in the realm of $500-700. I’m sure there are some who spend more, but probably not the ones who are also particularly budget conscious.

      The “it depends” is really about where you live, which resources are available to you (farmers, certain markets or stores), how big your appetites are, whether you eat a lot of grains or go heavy on animal products, etc.

      I’d love to hear others weigh in on their expenses, but let’s all just keep in mind how very relative of a topic this is. No getting down on yourself with comparisons, ok? 🙂

  17. Hubby and I are reading through Joel Salatin’s new book “Folks this ain’t
    normal” and I came across such a good analogy about the “high cost” of good
    food (grass fed beef, pasture eggs, etc..)

    Folks do complain about the high cost of our pasture eggs (us personally – not Salatin) and I know
    I have more than once thought about the high cost of grass fed beef.what
    most of us do not realize is that our tax dollars are used to subsidize
    “conventional” farmers. The farmers growing healthy meats, eggs, veggies,
    etc.. do not receive government assistance.
    So – the analogy (this is a quote directly from the book):

    “Suppose the nation have five automobile manufacturers and the government
    decided to subsidize four of them to the tune of $5000 per automobile. Would
    it be fair to scream at the fifth one about their high prices? Of course
    not. And yet that is exactly what people do when they accuse the local,
    ecologically based food system of high prices. We’re charging the true cost
    of goods and labor, not some artificial one. The truth is that the case
    register price for regular industrial food at the supermarket – processed of
    not- is a lie. It does not represent the subsidies. The biggest subsidies
    are not direct payments to the farmers, they are the tab society picks up
    for externalized costs. The cost or 500,000 cases of foodborne bacterial
    diarrhea that Americans will get this year from dirty food. What’s the price
    on a case of diarrhea? I don’t know, but I guarantee you if those were added
    to the supermarket cash register, food wouldn’t be as cheap as it is.”

  18. I found your blog on a Google search this evening. My husband and I need to get better about grocery budgeting. One of the things confounding us is how to account for all the paper products, first aid, toiletries, etc. In general, I buy these things at the grocery store but the price and usage of them change much more than the groceries we eat. It also makes the budget very bumpy month to month. Sometimes I can get a good deal on toilet paper so buy as much as we can store. At other times I only buy what we need because I can not get the price I want. Any ideas?

    Also, I am hitting the wall with meal planning. My husband requires a substantial portion of lean meat on the table nearly every evening and hates chicken. He does not like anything made in a slow cooker even though it keeps the house cooler. I do not eat the same thing more than once every two weeks when it comes to dinner (I’d rather not eat). In addition, we live in Phoenix, so when it is 110 I have to shop at least twice a week as things perish incredibly fast. Being pregnant, the fish available here is not much of an option due to mercury. The whole food aspect of homemaking is really bumming me out. At least when I didn’t have a budget I could just go to the store and come back with whatever was on sale. These days nothing I want to eat is ever on sale.

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