Money

After saving over $1,000 in two months, here's my No. 1 tip

In general, I'm pretty good with my money.

I track my spending and live within my means. To make sure I don't skimp on savings, I automate everything: A certain percentage of my paycheck goes straight to my 401(k). Plus, the first day of every month, a specific amount from my checking account is sent directly to my Roth IRA and my Ally high-interest savings account.

Since my savings goals are taken care of each month — along with my fixed costs, such as rent and insurance — I feel free to spend the rest of my paycheck as I please. Any money that I don't spend on groceries, coffee, shoes, or happy hour, which typically isn't much, is considered "bonus savings" and goes straight to Ally.

My system is a seemingly well-oiled machine: At the end of the day, I cover my expenses and set aside enough to hit my savings goals. So I've never thought much about trimming my spending … until Cash Diet, that is.

Turns out going cash only makes a huge difference.

At the beginning of January, I challenged myself to spend just $60 a week for eight weeks by going cash only. I figured I would save money by ditching my plastic, but couldn't have predicted how much.

Turns out I saved over $1,000.

After reviewing my expenses from before the Cash Diet, I calculated that I spend an average of $900 a month on discretionary costs such as groceries, laundry, travel, fitness, shopping, bars and restaurants.

The Cash Diet limited my spending to about $240 a month, meaning I saved four figures over the past two months. That's a lot of money, and it doesn't include the savings that are automatically taken out of my paycheck and checking account.

While a $60 weekly budget was pretty extreme, and I won't be ditching my plastic again any time soon, the challenge made me realize that I can probably set aside more each month. Clearly, I'm allowing myself plenty of leeway to buy things I want: About $660 worth each month.

It also made me realize the importance of revisiting your savings goals. While it's good to put your finances on auto-pilot, you can't entirely "set it and forget it" when it comes to your savings. As I learned, there's always room for improvement.

Read more about my eight-week long Cash Diet challenge: