If Cash is King, I Want It Dethroned
This cash only trial isn’t working too well for me. Going cash only will require a complete lifestyle adjustment because I happen to like using my credit card for everything. For example:
1 – When BabyGirl completed her first college application online (yay!), I handed her my credit card. I’m not comfortable using a debit card for online purchases.
2 – When I stopped for gas, I whipped out my credit card. I’m not comfortable with the extra hold they place on your funds when using a debit card for fuel purchases.
3 – To curb the urge, I even removed all credit cards from my wallet. But this was a decision I’d soon regret. One day, I tried to return an item and was so mad at myself when I got to the store. Why? Because I needed my credit card to finalize the refund!
4 – When I get money out of the ATM, it burns a hole in my pocket…literally. Knowing I have cash makes me think I should to spend it. Even if I don’t need anything, I will find something to buy. I spent $40 in two days and have nothing to show for it.
From my perspective, using cash is risky business and may even cost extra money. You run the risk of having your debit card number stolen when making online transactions. If that happens, you’re out of cold hard cash! If you pump $20 worth of gas, the station may put a $40 hold on your funds for x number of days. If I’m living a cash only lifestyle, I don’t need anyone taking more than what I owe! And worst of all, if you’re like me, cash in your pocket just makes you want to spend it! And I don’t know how to overcome this weird impulse.
Me no like cash. Help!
Any of you cash only? If so, how do you do it?
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Have you read the Fabulous Financials comment policy lately?
SM-your the best….
Now that’s out of the way…
Yes walking around with cash is bad for me, like you..I want to spend..
But as you said it takes discipline and I am sure you will concur this…
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You *could* use cash at a gas station instead of a debit card, you know. :) I try to limit myself by pulling out however much cash I’m allowed per week, and *really* using only that. I still use credit cards for purchases that require plastic (anything online); I just pay it off right away.
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SM,
Even if you use your debit card at the gas station you can select the “Credit” button. I use my debit card for all gas purchases but I always select “Credit” to avoid that additional hold on funds.
Thanks, didn’t know that will prevent the hold. I’m not too debit savvy. [-SM]
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Start off small with cash only system. I started using cash for spending money. I have an envelope for cash and once it’s gone that’s it until the next payday.
Next try cash only at the grocery store. Put the amount you have budgeted for groceries in an evelope with your list, coupons and calculator. It helps with saying no when the kid is begging for this and this and impulse buys because you only brought enough for what’s on the list.
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Hi SM,
I don’t post alot but I just wanted to comment on your post. As A posted, I just pull out the amount that I need between paydays but I include things that I know that I will need with a little extra for pleasure. For example, I estimate that I will need to fill up twice between paydays ($40/fillup=$80), tolls for two weeks ($20) and my bowling dues for two weeks($20/wk=$40). I usually take out $200 for the two weeks and spend the rest freely if I want without guilt. However, I do challenge myself to see if I can make it to the next payday without spending all of the money. I am always up for a challenge, so this makes it bit easier to bear. A couple of weeks ago, I actually only spent about $20 beyond the $140 already accounted for and was pretty excited. The end of these two weeks won’t be quite as successful but what can you do??
Hope this helps!!
ALF
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I am the opposite of cash only. Right now, I have about $0.50 on me. I normally get out $60 in cash per week just for spending money, and it usually gets spent. This past weekend I didn’t make it to the ATM so I’ve been using my debit card – I’ve spent about $20 whereas I’m normally toward the tailend of my $60 by now. The good thing is, I can’t go to the vending machine and get those Cheezits I’ve been eyeing, LOL.
Me too! If I have cash on me, I spend MORE! [-SM]
I can’t imagine paying cash at the gas station – going in, giving them money to fill up, then having to go back and get your change? Naw, I’ll pass, LOL.
My thoughts exactly! [-SM]
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Hello my name is Ki and I have been going cash only for about 6 months..(said in my best COA-Cash Only Anonymous voice). Yeah it was real hard in the beginning, but as time has gone on, it has really made me stronger. I am on this venture to get my finances in check, so I’m no where near my goals. So it was important to me to get my finacial life in order. And I figured one way of doing that is to stop charging items. First I decided to use my debit card for all my purchases..well, that was a eye opener. I soon realized that I was charging items that I WOULDN’T think of paying cash for. How ridculously ignorant was that. I do use my debit card for fuel, groceries, etc but I always hit the credit key. The fuel station in my area only holds a dollar of my total pumped, so I really don’t sweat that. But by using this cash only method, it seems to have tamed my spending by holding me accountable for the total dollar spent on items. Oh, I only like keep about $20 true cash in my purse.
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I’m not sure I’ve seen where a debit card purchase holds double the amount of your purchase. This must vary by bank. My experience has shown if you use a debit card as a pin transaction the amount is withdrawn immediately from your account. Credit transactions with a debit card hold 1 dollar at that time and in a couple days the actual amount is deducted. The 3 banks I’ve used; online and brick mortar all act the same way.
The only time I’ve seen as described is on my ADT (alarm) service. They automatically deduct the amount out of my firewall checking account. The balance is very low and only keep what needs to be taken out. If I have a balance of 40 dollars and ADT withdraws the required 34.78 they’re supposed to that should leave a balance of 5.22. I’ve seen the account go negative at some points. Keep in mind the ADT withdrawal hasn’t fully posted and the balance goes -29.56 for a day and the next day when the transaction posts my balance goes back to 5.22. Never any charges on my account when this happens.
We’re a cash only family of 6. We only use cash for certain family categories. We never carry large amounts of cash at one time. If my truck gets to a one fourth of a tank I know that day when I get home I need to get cash out of my envelope. For us who are raising 4 boys cash is psychological and we are very reserved on what we spend. Because I don’t like giving money away in fees of any kind, using a debit card restrains us from going over the limit.
Lived a credit card free life for 17 months and in that time we’ve paid 34k in debt and yes my grocery bill is high with 4 boys. Ages 14, 13, 10. 10.
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I’m moving to a cash envelope system next month especially with groceries, but will continue to use my debit card “as credit” at the pump. Being that I have a mountain of debt to climb, I’m tyring to utilize different styles to incorporate change.
Like I’ve said before, and I know I sound like a broken record :-), but keep posting. Every time you post, I pick up on something that I need to do and take action so that I too can be debt free with 50K cash sitting in my bank account.
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I love using cash at gas stations, a bunch of them in my area have prices up to $0.10 cheaper per gallon for using cash and if I’m driving by anyway it makes sense to have cash on hand to get that discount.
It is a bit more time consuming though if you are in a hurry and sometimes it is a hassle (then again, one guy in a gas station recently gave me a free sample of some sort of new candy that I didn’t see him give to others – I was in a very good mood and smiley).
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I am mainly cash only — my system has evolved erratically and is pretty idiosyncratic, though. Each payday (first and 15th of month), I withdraw a set amount for gas, a set amount for groceries, a set amount for fun. Then I go home from the ATM and take the cash out of my wallet and put it in three labeled envelopes in a drawer. Like you, in those days, if I had cash in my wallet, I spent it. Still sorta true. So generally I don’t put it in my wallet, unless I know that I will be buying gas, buying groceries, or doing something fun. If that’s the case, before I leave the house, I take what I think I will need from the envelope and put it in the wallet.
I’ve been doing this for about eight years, ever since I added up my cc debt, got scared, and decided to knock it down. I put myself on the cash system so I could control my weekly spending. It worked. During that period I never used a credit card, either, so that I could eliminate the debt — that broke me of the credit card habit. I stuck to it after I paid off all the cards. These days, I am starting to be able to carry a bit of cash and not spend it all at once — but I think all this training had to come first before I could do that!
In recent months, I’ve noticed that I have been using my debit card quite a bit in addition to the money in the envelopes. So I decided to start withdrawing more money at payday, to see whether I could basically stop using the debit card too. This is working to some extent; although house purchases (garden stuff, repair stuff, paint) tend to go on the debit card. In the last three months, I think in part because of this new approach, I have been able to sweep extra cash into my savings account at the end of the month. Whee!
P.S. I think it also matters that I basically stopped shopping. I buy clothing maybe three times a year, if that, and it’s always targeted — go in, get what you came for, and get out. After years of just automatically recycling clothing and furniture catalogs lest I be tempted, I find that now I am basically immune to them — I can read them and then junk them and then not go on a spree. I don’t wander through bookstores or malls in my spare time. (If I did that, I bet I’d start whipping out both kinds of plastic again, hah!) It probably sounds horrible and repressive: no shopping!! But actually, I don’t miss shopping. Funny.
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I am cash only! I am also the opposite of you! When I was only using my debit or credit card, I spent foolishly. It just wasn’t “real” money to me. When I switched over to the envelope system things got much better. The act of having to part with the cash in my hand makes me think twice. I know I only have X amount of money for grocery, gas, spending, etc. It makes me really think about each purchase and rethink my spending habits. When it comes to my spending money for the week, I ask for large bills at the bank when I withdrawl my envelope money each week. Having a $50 or $20 bill instead of smaller bills always makes me hesitant to break that big bill for a purchase. It’s all a mind game in the end, but we all have to find what works for us. One other thing that made going to cash easy was being realistic about what I could really get by on in each category. In the past, I have tried to be as miserly as possible, but it just doesn’t work. I ended up feeling deprived and as if I was being punished in some way. Sticking to “real” amounts has allowed me to not feel that way and save more than ever before.
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the thing that worked for me when I tried this experiment was using ACTUAL cash. Not your debit card but cold , clear, paper cash.
things that helped.
1) I monitored my budget initially (did a pre-plan) worked out how much I was willing to allocated monthly (After bills and fixed expenses) for food shopping, entertainment, pocket money, misc spending. e.t.c
2) allocated myself a fixed amount for pocket money (remember when you got cash as pocket money lol) and withdrew that amount from my atm every week for a month
– this helped to really nail down a realistic amount of pocket money
3) withdrew my food money (grocery) in cash at the start of the month and kept it in a seperate wallet.
– I take that wallet with me when I go shopping all my food receipts are kept there. It makes easier if I need to pick up something on the way home and I use my pocket money.. I can immediately take it out of that wallet and replace it.
Now, my credit card and debit card stay on me. I always use my credit card for online purchases and immediately pay it off from my debit account.
But this means impulse buys tend to be out because, the money has to come from my weekly pocket money.
For instance, if I want to buy a pair of shoes that cost £150 (having exhausted my clothes and shoes or misc. budget for the month ) and my weekly pocket money is £50.
then I know thats 3 weeks worth of pocket money and that means I have to spread my 4th weeks £50 over 4 weeks. (average £12) that won’t do, so I might have to spread it over 6 weeks.
i.e.
save £25 from my weekly shopping for 6weeks to pay for it.
*note* This is always done in arrears and not in advance.
when I tried to spending in advance i.e buying the shoes and then reducing my pocket money to make up for it. It didn’t work.
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I am the credit (almost) only one here who hates cash I guess. The only reason I still use a small amount of cash is because I need to use quarters to laundry in my apartment. Apart from that…..credit cards RULE.
I pay off my cards in full and earn cash back and rarely have to touch money. I worked at a bank (and then in retail and then in a low end restaurant) and I have an insane dislike for touching money.
Over the summer I traveled out of the country and was ‘forced’ to use cash only and I almost lost my mind. LOL
All the best to you and all the others who are cash only…I applaud you.
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I like to keep $20 in the trunk and $20 in in the console. On the times I run out of cash there is always something in case of an emergency. I just have to decide if its really an emergency.
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The only time I have had a hold put on my debit card was when using it to book a hotel room, and that was years ago. Have booked many hotel rooms since with no hold.
I have the same experience as JP with using my debit at the gas station. If I run it as a credit card, one of my banks holds $1, the other holds nothing. If I run it as a debit, the amount is automatically deducted from my account.
Also, check with your bank because any purchase made with my debit card is offered the same protection as a purchase made with a credit card.
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“Debt is dumb… Cash is king .and the paid off home mortgage has taken the place of the BMW as the status symbol of choice”…I love Dave Ramsey….and that’s the first thing that came to mind when I read the post!
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Single Ma, just for your future reference, I wanted to say that more than once I haven’t had my same credit card with me, and customer service at the store told me it didn’t matter which card the refund goes back onto. One time the card I’d used to purchase I’d had to close the numbers on the card, for some security reason (forget what). The store didn’t want to give me cash back, and said I could just use any card. Also congrats on Baby Girl going to college! That’s awesome. You two rock!
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