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Want To Reduce Credit Card Debt? Only Pay With Cash

I’m thinking about introducing “envelope accounting” to the Frugal Man’s family.

You know that system: Assign an envelope to each item on your family’s monthly budget. Put the budget item’s name on the outside of the envelope and the amount of money you intend to spend on that item inside. When the bill comes for that item, pull the money out of the envelope and pay it.

The beauty of the system is that it eliminates the convenient monthly excuse that you had no idea how much credit card debt you were running up, especially on budget-devouring items like eating out. With “envelope accounting,” when you run out of cash in your June entertainment envelope … tough luck! It’s cereal and milk for dinner, at least until July’s envelope gets stuffed.

It’s a great way to reduce debt because the system automatically activates your financial conscience. There is guilt associated with handing over gobs of cash for a night out at a restaurant. And your financial conscience should tingle even louder when you go home and steal some cash from the utilities envelope so you can cover tonight’s restaurant bill.

That’s why I’m convinced a restaurant owner invented credit cards. They know the only way to justify charging $100 for a meal you could make at home for $20, is to remove all guilt associated with the purchase. Credit cards do that and you don’t feel any stress, at least for 30 more days.

Americans Spend $709 Billion Eating Out

Nothing removes the guilt of overspending as effectively as a piece of plastic with your name, account number and expiration date ready for processing. Swipe it, sign it and forget it. Your financial conscience never comes into play and America’s extravagant spending at restaurants confirms that.

The National Restaurant Association says we will spend $709 billion eating out this year. The highly-respect Zagat survey on the “State Of Dining in 2015” says the average American eats out 4.5 times a week (not including breakfast) and spends $39.40 per person, per meal.

That comes to about $175 per person a week and about 80 percent of customers pay for it with credit cards because, after all, who carries around $350 a week in cash (assuming you don’t eat alone) these days? Besides, putting on the credit card means it’s out of sight and out of mind. You can enjoy the meal and not worry about your conscience bothering you, while you enjoy dessert or another glass of wine.

I was NOT one of those people until last week. In fact, statistically, I’m still not, though my conscience is fried after a week of what I would call “profligate spending” at various restaurants.

Graduation Time Is Costly

The cause of all of this was my youngest son’s high school graduation. It was the end of an era in our house. My wife and I will be empty nesters when he joins his two brothers at college this fall. Everyone in the family was practically weeping about it so we turned it into a week-long restaurant celebration.

It started a few days before graduation. Junior III announced that he got straight A’s for the first time in his high school career. “That’s nice,” I said. Mrs. Frugal was far more excited. “Let’s celebrate,” she said, and we did. Celebration dinner for 3: $54.78.

Two days later, Grandma and some of Junior III’s aunts came over, decided that his one semester of straight-A’s meant he was a genius so let’s party again, which we did. Genius dinner for six: $106.66.

Graduation day arrived, more family came in and after four hours of ceremonies, everyone was hungry so off we go for another dining experience. Post-ceremony dinner for 9: $180.03.

I’m paying for all of this with my credit card and now I’m shaking. We normally eat out once-a-week and that is at a Tuesday night “Half Off Everything” restaurant right down the street. We spend maybe $75-$100 a month at restaurants, so I’m way over budget and it’s not over yet.

The day after graduation, we get a call from his Scoutmaster, who says the paperwork finally has been pushed around enough people’s desks and Junior III is now the first Eagle Scout in family history.

“Go out and buy him the biggest steak in town. He’s earned it!” Scoutmaster says at that night’s troop meeting and the rest of the scouts applaud in a show of support. Mrs. Frugal caves to the crowd and we hop in the car for another restaurant spending spree. Biggest steak in town dinner for 3: $112.41

So now I have spent $453.88 at restaurants in about eight days. Yes, that’s way under national averages, but I looked at past credit card bills and it’s about what I spent eating out the last eight months combined. I am nonplussed.

Mrs. (not always) Frugal shrugs at the news. She argues that the price of groceries and the time it takes to prepare them has made eating out nearly a wash vs. eating at home and it appears a lot of people are with her. The National Restaurant Association says restaurants get 47 cents of every dollar spent on food.

Mrs. Frugal thinks when the boys are all gone, eating out four or five times a week sounds pretty good.

There is only one way to stop this avalanche of restaurant bills: The envelope please!

Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].

Man buying with cash instead of a credit card

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    1. NA, (2015, January 20) The State of American Dining in 2015. Retrieved from
    2. NA, (2015, January) Sales & Economic Forecast. Retrieved from