What Is a Cash Diet?
A cash diet is a low card, high cash diet that involves almost completely eliminating your credit and debit cards. This reduction in cards puts your wallet into an enhanced state of savings.
Simply stated, a cash diet means using only cash for purchases. People have a tendency to overspend when using their cards, so eliminating the temptation and budgeting a set amount each day, week, and month helps drive better savings habits.
How a Cash Diet Saves You Money
Would you agree that swiping your debit or credit cards makes shopping more convenient? It may even feel like you’re not spending your own money.
There’s research that suggests that people are willing to spend up to 83% more when using a credit card instead of using cash.
Cash is a tangible asset, meaning it can be physically held and holds a value. When you use cash, you have to physically take it from your purse or wallet and hand it over to someone else. You can instantly see that you have less cash than you did before. Painful right?
Think about your last few trips to the grocery store. How many times did you spend more than you budgeted for?
What if your budget shows that you shouldn’t spend more than $100 at the grocery store each week and you only bring $100 during your next visit? You have no choice but to stick to your $100 budget.
The same could go for your next visit to a restaurant, or the shopping mall. Really, anywhere that has some sort of discretionary spending where you could save money. By figuring out how much you’d like to spend in these categories and limiting it by only using cash, you avoiding overspending.