Liz Pulliam Weston suggests that you may want to consider using cash instead of a debit card. Weston admits that debit cards offer plenty of advantages, including:

  • They’re convenient.
  • They’re easier to track.
  • They may offer some protection.
  • They may offer some rewards.

Despite these advantages, she suggests that it may be better to move to a cash-only system. It’s just too easy to overspend with a debit card. She cites one family that uses the “envelope system” for allocating cash for various needs: the family places cash to envelopes (marked “food”, “gas”, “entertainment”, etc.) and uses this money for the designated purpose. This not only prevents overspending, but also serves as a sort of built-in budget. Experts advise: if you can eat it, drink it, or wear it, pay cash.

Before moving to a completely cash-based system, Weston warns to:

  • Expect some trial and error — it may take time to perfect the system.
  • Don’t carry big wads of cash — it’s too tempting to spend, and you have no protection.
  • Mind your credit scores — you’ll need them for large purchases, such as a house or a car.

I have not yet developed the strength of will required to forego my debit card completely. (Though I gave up all credit cards several years ago.) It’s too convenient. Still, there are times that I choose to use cash only.

For example, any time I go on vacation, I travel on a cash basis. I know that if I were to rely on a debit card while on holiday, I would be too inclined to buy souvenirs and to eat more expensive meals. If I’m headed to Central Oregon for a weekend vacation, I might take $100 with me, knowing that has to feed me, entertain me, and buy me gas for three days.

If you do opt to use a cash-only system, if only for a weekend vacation, be sure to track your expenses. It’s important to keep a notebook or a business card on which you write every cash expenditure; there’s no built-in record-keeping system such as the bank statements serve with a debit card.