Save and Invest

I ditched cash and lived off credit cards for a week—and cut my spending almost in half

The author.
Emmie Martin | CNBC Make It

Inspired by financial literacy month and CNBC's "SavingUp" challenge, I wanted to see if I could cut back on my spending by forgoing cash and using only my credit card for a week. Although cash diets work for some people, I was curious whether the opposite could work too. And the accountability of seeing all my purchases on my card statement has always been more motivating to me.

Before starting my cash-free week, I looked back at how much I typically spend over the course of seven days and cut it in half. My best estimate is that I spend around $200 a week on everything from groceries to Target runs to drinks with friends.

For my week-long experiment, I gave myself the goal of spending no more than $100 over seven days. I came pretty close, putting just $127 worth of charges on my card by the end. That netted me over $70 in savings.

Here's what it was like using only plastic for a week.

It is way too easy to swipe

Because I don't typically carry much cash, using just a credit card doesn't feel any different from my regular routine right away. I'm still worried that the ease of swiping my credit card will encourage me to mindlessly spend, though.

As it turns out, I'm right to be concerned. I make it through most of the day without spending a cent, but I decide to order delivery for dinner since I'm not feeling well and don't want to cook. It's almost too easy: All I have to do is pull up my Seamless app and tap in what I want. I can even tip through the app, so I don't have to worry about finding change.

Nearly $20 later, I've cut well into my $100 goal. It looks like I'll need to figure out a better strategy for staying on track.

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I figure out a system that works

To make sure I stay as close as possible to my $100 goal, I've started keeping a diligent list of each purchase I make, including credit card swipes and Venmo transactions, which are pulled from the same account.

But as I enter the second half of the week, I see that I've spent $78 on a mix of lunches out, activities with friends and household necessities. I'm shocked. How have I already blown through that much? It's a wake-up call: I only have $22 left to last me through the weekend.

I realize that while $100 is definitely more than enough money to cover my weekly expenses, it's easy to rack up charges without paying attention.

I vow to stick to stretch my last $22 over the next three days, and I begin mapping out exactly how I'll make it happen.

I exceed my budget, but overall, I've still saved money

I've been staying pretty frugal over the past couple of days and make it to day seven with a few bucks left in my budget.

But as I hang out with a friend on Sunday afternoon, we make the decision to treat ourselves to pedicures. Although I technically only have $3 of my $100 left for the week, I shell out $22 for the treatment and leave an $8 cash tip. That's the only time throughout the experiment that I break the rules and use bills.

I feel guilty about breaking my budget, but the sensation quickly passes. Enjoying a fun afternoon with my friend and allowing myself a weekend treat is far more important to me than saving $27. I still managed to cut back my typical weekly spending by more than $70 overall, so I don't sweat the last few bucks.

Other than wanting to leave a tip at the nail salon, I don't miss cash at all. Using a credit card is simply easier. Throughout the week, I never fumble for exact change or get anxious about not having enough money on me to be able to pay for something.

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Why ditching cash worked for me

In total, I spent $127. It's more than my original goal, but significantly less than I spend in a typical week.

Sticking to plastic was an effective way for me to save money. That's because I not only saw each transaction recorded on my banking app, but I also kept a handwritten account of every time I swiped.

Seeing the numbers written out forced me to stay accountable. Every time I bought something, I had to face exactly how much closer it put me to my limit. It became like a game: Over the second half of the week, I tried to spend as little as possible to avoid exceeding my goal.

And even though I ended up going over by around $30, I still consider the experiment a success because I saved money, and I didn't force myself to cut back on everything, either. I still indulged in Seamless delivery, meals out with friends and even a pick-me-up pedicure.

Instead of swiping my card on anything and everything, though, I chose which things were most important to me. Splurging throughout the week just meant aiming for low-cost weekend activities.

Though this method worked for me, credit cards have lots of downsides. For many people, they can lead to high-interest debt, which is never worth it. But if you're able to use credit cards responsibly and pay off your balance in full each month, ditching cash — and keeping track of all your purchases — could help you save, too.

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