Could you cut up your credit cards and go cash-only?

It’s easy to overspend when all of your money is on a card. You just pick out everything you feel like eating at the grocery store, roll it up to the clerk, and don’t even bother noticing the price they list off when they ask for your money. Instead, you just hand them the card and move on – no matter how much it costs.

Maybe that’s why the average Utahn has so much credit card that, according to the American Bankruptcy Institute, it’ll take the average person in this state 17 years to pay it off.

But what if we fixed a new problem by doing the old-fashioned way? What if we cut up our credit cards and went cash-only?

KSL Newsradio’s Dave Noreiga explained how his mother used cash to keep her budget in line — and how he learned the hard way that he should have followed her example.

How to live cash-only

Every month, when the Noriega family’s paycheck came in, Dave says that his mother would take all the money they had to spend, put it into envelopes, and stashed in her sock drawer.

That money, he says, was it. It was never replenished and his mother never broke out the credit cards. They just spent the money in that envelope and, when it ran out, stopped spending money.

“If there was some money there, we could have some fun,” Dave says. “But once that envelope was empty, it was gone.”

Some money would be stashed into an envelope for food and some in an envelope for everything else, but everything had a specific, set budget. If they budgeted $500 a month for groceries, they had to stay on that budget. As long as they stayed strict to the system, they didn’t have any choice.

“You learn to budget in each area,” Dave says. “It wasn’t just: ‘Hey, I’m really, really good about not buying new clothes, but I’m terrible about buying food.’ It was: ‘I have to be good in every area.'”

Dave says it worked. “It kept her out of debt, it kept her out of credit card use.”

Cutting up credit cards

Dave Noriega follows in his mother’s footsteps — or, at least, he does now. That wasn’t the case, though, until about three weeks ago, when his wife didn’t give him any choice.

“I got a post-it note from my wife,” he says. “There was a post-it on the side of my bed and it said: ‘These are your credit card charges.’ I had racked up $350 in credit charges that she wasn’t prepared for.”

Despite his mother’s good example, Dave says that he made all the mistakes she avoided. He signed up for every credit card that offered a small in-store discount and pretty quickly lost track of how much money he was spending.

“I’ve been through some dark times,” Dave says. “I get sucked into it. It has been toxic to my life.”

Finally, his wife put her foot down. She left him that post-it note on a stack of twenties, letting him know that, from now on, he was going to be doing his shopping his mother’s way: with a set budget in cash that just can’t exceed.

“An allowance,” Dave says. “I flat-out get an allowance.”

More to the story

Whether you call it an allowance or a budget, it works. Read about how Dave Noriega now uses his mother’s system to feed a family of five for just $400 a month.

And listen to Dave Noriega tell the story himself on the Payday Monday podcast.

Dave & Dujanovic can be heard weekdays from 9 a.m. to noon on KSL Newsradio. Users can find the show on the KSL Newsradio website and app, as well as Apple Podcasts and Google Play.