Today’s post is from our regular Tuesday contributor, Sally.I’ve always been more of a visual learner; I love having a hard copy in my hands that I can look at and comprehend. It just makes me feel calm and in control when I have that reference.
So I suppose it would make sense that when I switched to using cash for the majority of my purchases, I started to not only pay attention to how much I was spending, but also to what I was spending my money on. It allowed me to have that visual that I had been missing when I simply had to pull my card out and swipe it, without seeing the numbers change in my bank account.
Let me pause and say that I do realize (now) that I could have created a visual in Excel or used my checkbook and entered all of my purchases, deposits, etc. in it, but I didn’t think I needed to do that – not even after over-drawing my account a few times. It was just easier to sweep it under the rug and tell myself that I was going to be more careful and pay attention better the next time (I was kidding myself).
Many companies have moved to direct deposit for their employees, which can be really great and I thought it was too; especially when I moved to a state that didn’t have my bank. I didn’t need a branch of my bank there though, because I had direct deposit! How convenient! Then I realized how inconvenient it was because I also lived in a small town and was in college; cash is needed to pay for a lot of things around here. However, sometimes I can be a bit stubborn so I simply made do, not wanting to deal with multiple banks and cards.
Fast-forward some years later and I have a great job with direct deposit, but I also have this great side job. I’ve moved a few times, but again, I’m back in that small town. One thing I wasn’t sure about in the beginning at my new side job was the fact that they didn’t offer direct deposit. They do, however, allow you to cash your check on the spot though and I decided to try that.
I didn’t know what I was missing!
It suddenly became so much easier to figure out my budgeting simply by having the cash right there. I also found myself being more strict on what I was purchasing and was putting money aside to save up for bigger purchases. Creating documentation is actually something I look forward to now and I get such a sense of accomplishment whenever I fill it out or am able to purchase something that I’ve been working towards.
Who would have thought that the simple act of actually using the green stuff would allow me to set up an actual budget for myself, stick to it, and learn so much along the way.
What do you prefer to use, cash or plastic? When did you start creating budgets for yourself and what helped you realize you really needed one?
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Using cash also makes you conscious to your spending. A long time ago I tried going all cash as an experiment. The experience was an eye-opener!
Sometimes the old ways are the best. My parents still don’t use an ATM – they withdraw the cash they need for the week and the pay everything that way. It does make it so much easier to be accountable for spending. I use a mix of cash and debit cards, but practically never use credit cards. I prefer to know the money’s in the bank.
Since I always hear cash is better, since you can SEE it leaving your hand, I’ve tried using cash-only (or cash-mostly, at least) a time or two.. but I must be wired the other way around! For some reason, when I have cash, I blow it on the stupidest things without even batting an eye. I think it’s still a visual cue for me, it’s just a different kind. For the majority of my life, the only time I had or even saw cash was on a special occasion. It was either given as a gift or my parents might have used it when we went to an amusement park or something outside the norm and it was definitely understood that it was a treat. So I think in my subconscious, when I have cash I think “I must have extra money! Whoooo!” So, long story short – I use plastic because I can A. get the credit card reward points for spending I was going to have to do anyway, and B. I’m WAY more conscious AND cautious about what I’m purchasing and how much it costs.
I prefer plastic. I usually carry $20 or so in cash at all times but I prefer plastic. My biggest reason is that I like to get a statement with all my spending and I also think its a bit safer. If someone steals your credit card (happened to me) the cc company will usually not charge you for the stuff purchased by the thief. However, if someone steals your cash, you are sort of screwed. It’s really hard to track.
I prefer plastic for the points and other benefits, but for my clients who need to be more mindful of their spending, I recommend a cash lifestyle until they get a better feel for what is really happening with their finances. I also suggest parents give kids a cash lifestyle too, in my opinion, giving them credit and debit cards does nothing for their understanding of money.
I understand exactly what you’re saying. Using Excel or simply monitoring my accounts online or on my phone is elusive. Having the cash in hand is concrete and I become more protective of it because I know I need to make it last until next pay day. Because of this, I tend to have a few extra dollars left over. The next pay day I only withdraw the difference of what I need and send the extra few dollars in my account to my Roth IRA. They’re small contributions, but they add up. Makes sense to me. Great article!
I only use credit because we pursue rewards. I haven’t used cash in years! But to each their own. Everyone has to find a system that works for them.
I think if cash works for you, that’s a great system. I am one of those people who would be fine if they did away with cash. I use credit of debit cards for just about everything for the rewards, but it took lots of financial mistakes before I learned that you can only buy what you have money to pay for. Credit card interest is the worst.
I use plastic mostly to track my spending but I think cash may be a good option for someone just starting out or who has difficulties with credit cards.
I prefer plastic for tracking purposes and ease. I almost never have any cash on me at all unless I happen to be going somewhere that doesn’t accept credit cards (rarely). I think everyone should do whatever works best for them :)
I like using my credit cards as it makes it easier to track. If I do use money I try and write it down, but sometimes I forget! I just find it easier to pull up my account and plug the numbers into a spreadsheet. I started tracking my spending last year when I moved out since I had more stuff to pay for!
I actually do better with plastic. Now that I have access to my bank account right on my phone it’s easy for me to look at my statment to see how much I’ve spent over the past few days and what on. If I have cash in my pocket it’s already withdrawn from my account (and therefore looks like it’s already gone) so I’m much more apt to spend it at that point.
Cash is king in my book.
I prefer to use plastic because it helps me with my taxes at the end of the year to have a paper trail of what I spent my money on. It’s easier than a lot of little receipts all over the place.
I don’t know whats wrong with me, but I spend cash much more freely than I will on cards. I also end up with like $6 in pennies and dimes after the day. I actually do much better with my debit card, so I stick to that. But budgeting is key for using cash or card, definitely.
I like the paper trail and the rewards of credit cards. I avoid cash at all costs now.
I almost never carry cash. I’m lucky if I have $5 in my wallet at any given time. I like using my credit card because I can just swipe and not worry about having change. I also recently got a British Airways card so I can earn some free flights with my rewards, so I’m really excited about that.
Prefer to use credit because it is easy, but try and use cash because it is much easier to stay accountable.
I lose track of cash so easily so I prefer credit as I can easily track my spending. I try to always have cash on me but never more than $60 for fear of overspending and pickpockets (I live in a big city and take public transit… I know how easy it is for criminals to reach in purses and take wallets in a crowded subway)
I always pay with cash. Always.