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:
- Here's how I keep my grocery bill under $30 a week
- After living on $60 a week for 5 weeks here's my No. 1 money-saving tip
- I've lived on $60 a week for 6 weeks—here is my top takeaway
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