At the beginning of 2019 I resolved to finally solve a spending habit that had gone mostly unchecked for most of my adult life; building on a habit I had started in 2018 of recording all of my purchases, and including a plan to retire consumer debt that I had allowed to pile up over the course of the previous 10 years.
Given my successful career and my relatively low living expenses, being (close to) debt free was a reasonable and obtainable goal; one of the strategies I employed to help me track each and every purchase for 2019 was eliminating my use of cash. I made a single exception to this rule for the use of foreign cash when I am overseas, but all purchases made in Canadian and US dollars were to be made with a debit or credit card.
This year I have spent about $100 in Canadian cash, including a withdrawal of $80 on June 12, 2019 (the only visit to a bank machine this year); mostly through donations and when traveling in June. I end the year with more cash-on-hand than I started it having sold an item on kijiji for $50. And, I retired every penny of debt – except for my zero interest lease payments on my car, which are due on the 14th of every month until June 2021.
I devised a multi-tab excel spread sheet that serves my purposes (although I am looking for software options that might help me automate more of my process), and I regularly – at least weekly – consult all of my statements (through apps on my phone) to determine exactly how much money I have earned and spent in the previous period. Using a formula to calculate my monthly net income I am also able to quickly determine exactly how much money I have available to add to my emergency fund – my retirement savings are set-up through automatic withdrawal.
On balance, my year without cash was a success. Going cash free allowed me to:
- Create a easily accessible record of every purchase and payment.
- Accurately track my income and expenses.
- Eliminate forgotten spending (through lost or unretained receipts).
- Earn points and rewards for every dollar spent.
My goal for 2020 is to go back to carrying small amounts of cash without losing track of how I’m spending my money; being able to make small purchases and donations. What are your money management goals for 2020?