The “Cash Diet” Challenge: 4 Ways to Force Yourself to Save Money

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By: Meredith Witthar | Kristina Guerrero Posted: 4:18 PM, Apr 30, 2018 Updated: 1:59 PM, Jul 5, 2018

Trying to save money? Take it all out in cash! It’s called the all-cash diet. We asked personal finance expert and author of the Broke Millennial Erin Lowry how we can save by switching to cash.

1. Determine Your Cash Flow

Erin says the first step is to determine your cash flow. “How much money is coming in, how much money is coming out – that difference is the amount that you have to spend every month,” says Erin. “I also would encourage you to include saving in that amount.” You can still pay your major bills online. But whatever money is left over, you’ll take that out in cash and that’s all you can use for spending money! “Any purchases you make that week are only in cash,” adds Erin. “When that money is gone, it is gone. You cannot dip into next week’s for this week.” But you can roll over cash to the next week – or put it into savings!

2. Use the Envelope Method

Next up, use the envelope method to help track where you’re spending. You’ll identify your big spending categories like housing, food, utilities, and your phone. Your envelopes may vary depending on what bills and categories you can pay for in cash. “At the beginning of every month, you have assigned how much money needs to go into each envelope,” explains Erin. “You fund those envelopes with your paycheck.” That way you can be stricter about where your money is going. “It is a really good method for people who need a lot of structure, and for someone with any type of an aggressive goal, whether that’s debt repayment, or saving,” insists our expert.

If real envelopes seem archaic to you, there’s a digital version! “There’s an app called  Mvelopes,” shares Erin. “And if you are strict about it when the money is gone, it’s gone. So if you run out of your grocery money in week three, you’re supposed to be sustaining off of whatever is in your cabinets for the rest of the month until you refresh.”

3. Leave a Buffer

And the final step, leave a buffer. “Because the first time you outline things, I promise you are either going to forget something, or you’re just not going to totally account for how much something might actually cost, or little things come up,” says Erin. So she recommends leaving a $100 buffer, or whatever you can afford as a buffer in your account.

4. Try the Dime Hack

Looking for more ways to save money? has a few hacks and challenges to help you stash more cash. Our favorite is their Two Liter Dime Money Saving Challenge – which helps you save between $550 to $700 over time – because it’s so easy! All you have to do is fill a two-liter bottle with a dime whenever you receive one. “At first glance, this money-saving challenge will take a long time to complete,” says the website. “However, if you become proactive and request dimes at checkout counters when you receive change, then the process will speed up exponentially. Cars and couches are great resources for spare change.” So be patient and give this challenge a try!




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