I had a very difficult period* years ago while trying to finish a masters in NY (never finished it), I did something similar. I would never spend any cash, I would keep it until the last moment because it gave me options.

I believe people do this because, in case of an emergency, they can switch to public transportation and use that cash for something else.

*Difficult period: I had money for one meal a day. Didn't have money to pay for two subway rides so I would walk 6 miles a day to walk from the campus to the place I was living (which was a garage's attic).