Tips for a Successful Cash Diet

Tips for a Successful Cash Diet

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Is your debit and credit card spending getting out of control and sabotaging your savings efforts? It might be the right time to go on an all-cash diet.

Cash diet is the exclusive use of physical money for spending, putting debit and credit cards away as you strive to take control of your finances. The idea behind it is that when you’re exclusively using cash to pay for products and services, you become more conscious of your financial situation and live within your means.

In a sense, a cash diet works just like a juice detox. Just as juice cleansing helps to reboot your body, going on a cash diet reboots your financial life and improves your bank account conduct, helping you get approved for car loans and other financing options fast.

Here are some tips for a successful cash diet:

1. Create your budget.

Every payday, identify your take-home income and budget for bills, debt repayment and savings. If you don’t know how much money to allocate for your spending and savings, you can follow the 50/30/30 Budgeting Rule.

Once you have decided on the allocated amount for spending, list all the items and services that you spend money on, from your essential expenses like food and utilities to non-essential stuff like entertainment and recreation. Make sure that you have enough cash for these expenses. If not, you may need to eliminate some non-essentials to make everything fit within the budget.

As much as possible, don’t forget to allocate money for your entertainment and recreational needs. While you don’t have to allocate an extravagant amount for this category, spending for a few treats can keep you motivated to stick to your all-cash diet.

2. Divide your spending money into different categories.

Withdraw enough money to cover all your expenses until the next payday. Then, divide the amount into different spending categories, like “bills”, “groceries” and “entertainment”. You can follow the Envelope System when breaking down your spending expenses. Simply put the allocated amount for each category in an envelope, then label it with the category name.

As you spend, make sure to only use the cash from the right envelope. For instance, when you need to buy groceries, get the money from the envelope labelled, “Groceries”. If you run out of cash for this category, adjust your budget by cutting down the allocated money for groceries or for other categories.

3. Leave your debit and credit cards at home.

To avoid the temptation of using a debit or credit card while going out, leave them at home. This will be difficult at first especially if you are used to the convenience of using plastic for shopping or dining in restaurants, but it gets manageable after a few days.

Without the debit and credit cards to help you conveniently buy a product or pay for a service, you’re likely to cut down unnecessary expenses. Can’t place an online order for a discounted dress without a debit or credit card? Then, you might need to pass on this item until you can allocate actual money to buy it in store.

4. Bring enough cash for your intended spending.

As you go to a store to buy your grocery needs, for instance, bring only enough money from your “Groceries” envelope. This will help you limit your spending to what’s on your list and avoid impulse buying.

5. Use the leftover money for savings or debt repayment.

At the end of each payday, you might find leftover money from your spending budget. You can either put the extra cash into your emergency savings fund or add it to your debt repayment budget, especially to the one with the highest interest charge.


Starting a cash-only diet can be challenging, but it can be very rewarding in the long run as you learn to take control of your finances, live within your means and build a healthier bank account.


Positive Lending Solutions specialises in securing loans for people with bad credit. Call us on 1300 722 210 or get a Quick Quote. Our Bad Credit Loan Experts will get back to you ASAP to start working on your loan application and sorting out your credit history.


See also:

How the 50/30/20 Budgeting Rule Can Help You Save Money

Finding Balance Between Saving And Splurging

How Bank Statements Affect Your Loan Qualification

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