Until June, our household's spending was done almost entirely by cash-back credit cards; auto-debited utilities and such notwithstanding. (Check my "How We Manage Our Money" post for a few more details.)
Why use plastic? (All balances paid in full, of course!) Well, it's insanely convenient. It makes for one simple monthly payment. It allows easy record-keeping. There's no need to tote around cash or change. Plus that one- or three-percent cash-back adds up pretty quickly.
But then, of course, there are the negatives. Here's one everybody's heard:
And if you prefer, a more scientific slant on that:
So Let's Look at June
So how'd it go in June? Well, here are seven expense categories in which I would've expected to see "cash only" effect some changes:
My Quicken reports have lots more spending categories than that, of course. But as I scanned through most of the others (utilities, insurance, and so on), I was able to discount many of them: We didn't go cash-only with utilities, for example. And even if we had, it wouldn't change what we spent.
But Was It Really Because of Cash?
As we can see, in the spending categories listed above, we spend just a nudge under 19 percent less in June than we did in the previous three months (averaged across March, April, and May). That, in my mind, is significant.
It's possible, of course, that we spent less in June on things like groceries and household items simply because we had "stocked up" on these items in May. If this was the case, it was unintentional.
Also: There's this thing with "special occasions" and increased spending. For instance, my wife mentions that May included some wedding-related clothing spending that otherwise wouldn't be there.
My response to this? Well, what she says is true. But every month has that sort of spending somewhere. There are no "perfect" months.
This is why I'm using a three-month spending average for comparison — it helps smooth things out just a little.
So Let's Try This Again!
As I see it, the best way to prove/disprove the impact of cash-only spending at MY household's level would be to keep doing it over several months. By doing this, I could compare a cash-only monthly average from June/July/August to our "use cash-back credit cards at every opportunity" normal spending average from March/April/May.
To be honest, I was really surprised to see "cash vs. credit" the spending difference be as high as it was for June. I was expecting to see perhaps an eight or ten percent decrease. But not much more than that.
Obviously, I was wrong.
Which is why we plan to do more cash-only in July! Let's see what happens...