If you know anything about the midtown Toronto food scene, you know Albert’s Real Jamaican Foods. Bone-in chicken roti and oxtail curries are a local legend around St. Clair Avenue and Bathurst.
A few weeks ago, I was frantically rummaging through my wallet at the take-out register looking for extra coins for a pineapple upside-down cake. It’s on the steaming bag of roti that I secured with the $20 bill I pulled out for the day.
As any loyal customer knows, Albert’s only accepts cash. And even though I fumbled my purse in front of the queue, I couldn’t secure a treat.
Initial frustration aside, I saved about $5 by not buying the cake. The savings were modest, but they got me thinking. “How much could I save if my credit card stopped working?”
Cash-only budgets have been touted for decades as a saving grace against impulsive spending. But in a digitally driven world, they’ve lost much of that enthusiasm.Actually recent Report from Dalhousie The university predicts that 26% of Canadian grocery stores will no longer accept cash in the next five years. Nevertheless, many young people go against common sense to save money.
“Thanks to that, I was able to pay off about $25,000 in debt,” says a Vancouver resident. sasha grayWhose TikTok channel It promotes the benefits of cash-based budgeting and teaches viewers how to “cash out,” or split income into labeled envelopes assigned to various spending goals. Her profile has amassed around 200,000 followers.
“Each pay period I budget. I pay all my major bills online and then pour cash into sinking funds and savings,” says Gray.
Her budgeting techniques are unfashionable. “Having cash allows us to spend more wisely,” he says. Christine White, Financial Advisor to Money Coaches Canada. “There is a sense of loss. The visual and mental connection is lost when you tap the cards.”
For someone like me who can’t remember life without Apple Pay, a cash-only budget for 2023 seemed both intriguing and impossible. So I decided to try it myself.
After checking my budget and calculating my savings in the Mint app, I headed to my local bank and withdrew about $150 for the week.
My budget covered optional purchases like coffee pods, movie tickets (it was a weekend of Verbenheimer after all), and my Shin Ramen obsession. This includes non-discretionary purchases such as subway fares and prescription refills.
What it didn’t include was rent and a Netflix subscription, which were automatic payments that were pulled out of my account each month.
Day 1, I left my credit card at home and began my foray into the cash-only world. Soon, I encountered my first obstacle when refilling my metro pass. The machine showed no interest in my wrinkled $20 bill and the card machine activated my Apple Pay.
After much fumbling, I convinced the machine to take $20, googled “how to void Apple Pay”, and cut all ties to digital money except throwing away my phone.
The next few days proved how hard-wired I was to rely on impulsive digital spending. All my planned budgets seemed to have gone out the window when I was tempted by the local Longo sales corner.
Grocery shopping has become time consuming. I was doing mental math in each aisle and googling alternatives to expensive ingredients (no, applesauce is not an egg substitute for cake batter, no matter what Reddit says).
By the fourth day, I was keenly aware of how quickly the money was disappearing. Counterintuitively, my wallet got heavier as coins gave way to higher denomination bills. I had about $60 left.
I was desperate to find the money, so I scrambled uptown errands and took a 15-minute detour to a cheap pharmacy to meet the two-hour layover deadline for my free ride home.
I was grateful when I was tempted by an Americano at Pilot Coffee and was told “no cash accepted”.
By the weekend, I was incredibly close to avoiding visas. Until I realized I hadn’t bought a movie ticket after all. Not only did I not have enough cash left, but waiting at the theater for payment could prevent me from getting a decent seat.
Nikola Gradjevich, professor of finance at the University of Guelph, said: “Although budgeting exclusively in cash may help you make important spending decisions, it also comes with many inconveniences. It’s time consuming and risky. and not everywhere accepts cash.”
But as much as I’d like to apologize for the failed experiment, my failure had little to do with the lack of cash per se. At the root of cash budgeting is the simple idea of creating a physical barrier between yourself and unnecessary spending. And these days, cash isn’t the only way to do it.
“You want to stick to your cash budget, but you spend $500 on Visa this week, and you just transfer it to your checking account to create credit for the next period,” he says. Janet GrayI am an Advice Only Planner Certified Financial Planner.
Banks like Tangerine and BMO also offer sub-accounts for different spending categories, which you can tie to your savings goals. “So don’t call this a cash-only strategy, call it a ‘no credit’ strategy,” says Gray.
If you really want to break down the psychological barriers to budgeting with cash, “spend cash for specific categories of your life, like groceries or specific errands,” says financial adviser Ms. White. “It makes money feel really finite.” In fact, this is the reality that digital spending can mask.
In the end, I nodded, thinking that I’d be hearing Cillian Murphy’s “out-of-this-world performance” for another week without seeing it with my own eyes. I bought my ticket online.
Are you a young Canadian thinking about money? To set yourself up for success and avoid costly failure, Listen to the award-winning stress test podcast.
