Cash Only: Can it save your family money?
For the first time in our 15-year marriage we are trying to use only CASH to pay for things.
I know this is not a new concept, and I know it is touted by money gurus as a good way to save money, which is why we’re finally giving it a try.
We’ve always used credit cards and have always paid them off every single month. (I can think of two times in our entire marriage that we ever let a payment roll to the next month on a credit card.) Debt is not our problem.
Our problem is that we spend more than we should each month because it is so easy to whip out a charge card and pull the extra money from savings later to pay the bill.
The problem with this is not that we can’t cover the bill (at least at this point) but that we could be saving more than we are. Plus, we are often wasting money on stuff we simply don’t need!
(I need to clarify that I am still paying our regular monthly bills (like mortgage payment, car note) online deducting from our bank account, but we’re trying to use only cash, no credit cards, for things like groceries, vet bills, gas, birthday presents, etc….)
This will be my third week as a cash-only customer and Michael’s second week. (I started while he was on a business trip so he was on his company’s dime that week.)
Already we are seeing the effects of only paying with cash.
So many times last week I put things back on the shelf at stores because I knew it was coming out of the very limited funds in my purse. For example, I went looking for a birthday present for one of Rose’s friends and saw some cute dresses for my 2-year-old at the Gap. If I hadn’t been paying with cash I can guarantee you I would have bought at least one of those dresses. Plus there were some super cute pajamas the baby would have been adorable in. I put back an organizer for myself and a book for my brother because I knew I didn’t have that much cash in my purse.
Michael came home last week and said he was sorry for doubting this experiment would do much good. He said it limited him the whole week. No pizza for lunch when he knew he had a sandwich in his office. No nut mix or Fiddle Faddle at the drug store when he stopped for deodorant.
What we’re trying to decide now is: If you have leftover cash at the end of the week do you just take less money from the bank for the next week or do you put that money in a big jar for special things like vacations?
Could you go credit card cold-turkey? Could you go cash only? If you are a cash-only gal, how do you handle the logistics of it? Do you get a monthly amount, a weekly amount? What do you do with any money left over? How much do you give yourself for the month? How much does hubby get? (Poor Michael got a lot less than me because I’m buying for all five of us and he’s just taking care of himself for the most part.)
What do you do with odd bills — like I need to buy a new mattress for the toddler bed for the baby – does that come out of my weekly amount?
Tell us about cash-only experiences? Would you be willing to take my cash-only challenge?
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68 comments Add your comment
RJ
August 24th, 2009
8:08 am
My husband and I also started this practice and it’s working great. Although we weren’t paying our bills off every month. But we’ve gotten our debt down and by paying cash and using lay-away at Marshall’s, we’ve managed to save more and really stop oursevles from spending too much. This was the first year that we didn’t use the credit card on our vacation.
Andrea
August 24th, 2009
8:14 am
I have become more of a cash only girl in wake of the recent economic downturn. I absolutely make allotments for certain things. The success is sticking to it. It is tempting to just pull out a card and use it, but eventually, it will come full circle. If you don’t have the money, don’t use a card.
I budget a certain amount of money every month for the non-essentials. For instance, I only buy a certain amount of snacks for the kids. If they unwisely eat them all at once, they have to wait until the next month. I also put myself on the same restrictions. I brown bag lunch and I give myself a budget to eat out with. If I spend it all early in the month, it is gone. If I don’t spend it all, nothing rolls over to the next month. It is the same monthly allotment.
If something is unexpected, I have to make arrangements for it. If I have to use a card for a major purchase (like tires, household repair or purchase, or anything else), my initial reaction would be to try to pay for it with cash, but if it is not feasible, I will definitely have a plan on paying it off within a short time.
The main disadvantage I have found with being cash only is time constraints. I have to go into the store to pay for the gas instead of paying at the pump. I have never been one to carry a lot of cash around, so I am nervous about keeping cash on me. The other problem is that the card companies see when you have paid the card off, they will send you some very tempting offers! With two children, it has been hard to resist some of their offers but I had to.
It is my intent to continue to lived a scaled back lifestyle and even when the economy improves, I don’t think I will ever use credit cards again as I have in the past.
motherjanegoose
August 24th, 2009
8:20 am
I am pretty much a cash person. I do not have a debit card. I use my business credit card for any business expenses and have oodles of points with it but my clients are enabling me to have that perk. My credit enables me to cover my business expenses ( for them) until I show up for the meeting.
I allow myself a certain amount of cash each week and typically do not go over unless we have a surprise such as the dog having an ear infection. I am very thrifty. I have no credit card debt. This was not always the case. My husband and I have separate accounts, which I have mentioned before and got raked over the coals but it works for us.
motherjanegoose
August 24th, 2009
8:22 am
Not trying to hijack the blog but if Obama is spending $35,000 ( of his own personal money) to rent a vacation house in MA this week, what kind of message is this sending to unemployed America? This is NOT for the security….WE are picking up that tab. This is for a place in MA and wonder why he is not staying in an area that could really use the tourist dollars instead of somewhere where most folks are economically well healed?. I’ll bet he is not putting it in his credit card….haha and do most Americans who are begging for health care even MAKE $35,000 per YEAR?
THE PRESIDENT NEEDS A VACATION. Since he chose to be in the public eye, every action is looked at carefully, as it should be. Does he not have friends who could offer him a wonderful vacation retreat that would be less expensive. Maybe I am too picky here.
tman
August 24th, 2009
8:36 am
motherjanegoose, would you prefer him staying at Motel6?
Kitty Boo
August 24th, 2009
8:42 am
Dems Obamas’ are do it in stylz.
Andrea
August 24th, 2009
8:42 am
Motherjanegoose, haven’t taxpayers always contributed to the President’s vacations?
HB
August 24th, 2009
8:45 am
I rarely use a credit card, but almost always use a debit card. I’ll be interested to see what people who have switched to cash only say. Maybe I should look into switching over.
As for the vacation home, the Obamas are not paying $35,000. That is the total cost to rent the estate, which is large enough to house staff and security. The Obamas are paying for a share of the home; tax dollars are picking up staff and security costs as is the norm.
motherjanegoose
August 24th, 2009
8:50 am
No, I would not stay in Motel 6. …see an option below.
@ Andrea…I read that they are paying for the rental themselves and taxpayers are picking up the security tab , perhaps I am wrong…..
@Kitty Boo…Obama’s actions speak louder than words…
Private Beach, Tennis, House Rental ( 4 BD I think) in Martha’s Vineyard Oak Bluffs, Massachusetts Vacation Rental by Owner Listing 229919 is going for $4600.00 per week…..they must be REALLY having a vacation if they are paying $35,000!
EVERYONE…do not forget the topic of the day….I’ll bet the Obamas CAN pay cash for this trip!
Gem For Life
August 24th, 2009
9:03 am
It’s amazing that when previous Presidents and their families took vacation you never heard about it…..and we the tax payers paid for it, so what’s the big problem here…if the media and everyone else would get pass the fact that he is no different (other than skin color) is the same as past Presidents then we wouldn’t have to discuss their every move… I also pay cash for everything… no credit cards!
JJ
August 24th, 2009
9:04 am
Welcome to my life!!!! I’ve not had credit cards of any kind since I was in my 20’s. I have lived a cash only basis for YEARS….and yes you can save. You also get to actually SEE your money.
I never spend my change. It all goes into a jar in the bedroom. I empty out my wallet about every three days of change. You would be amazed how that change adds up. Last year, I cashed out the change just before Christmas, after one year of saving, and I had $275.
I have NO plastic in my wallet, other than my debit cards. I use them at the gas pumps, and to pay bills on-line or over the phone, and of course, to get cash at the ATM.
I also take advantage of the banks “save the Change” programs. Bank of America rolls your purchase up to the next dollar, and takes that amount out of your checking and puts it into your saving. For instance, at the gas pump, I pump $20.15. BOA rounds the purchase up to $21.00, and puts 85 cents into my savings. Not much, but again, after time, it builds up. Wachovia takes $1.00 every time you use your debit card, and transfers it into your savings. Yes it comes out of your checking account, but it is a small step towards savings.
And it’s a great disclipine tool. If you don’t have the cash, you don’t get the item. It’s so easy to swipe a credit card, and think, oh I’ll pay for that later……but with cash, you get it then, or you don’t get it at all.
I don’t need a big fancy tv hanging on the wall, the one on the stand works just fine.
I don’t need a big fancy car in the garage. The 10 year old car I drive is just fine.
Living on a cash basis is great for sleeping at night. NO ONE can come and take anything from me, it’s all paid for.
I’ve owned two homes without the need for credit cards. I’ve furnished those two homes without credit cards.
You will be amazed at how much better you can budget yourself when you limit yourself to cash!!! Cut up the credit cards now. Or do what Clark Howard says, stick them in the freezer in a baggie, and use them for EMERGENCIES only.
I have two friends who are so dependent on their credit cards, and they are both over $20,000 in credit card debt. No thank you.
motherjanegoose
August 24th, 2009
9:08 am
I stand corrected…it is a 20 million dollar 20 acre compound….guess I am the only one who will never get to vacation in this style…hahaha…nor will I be president!!
@HB, regarding the Cheerios left all over the airplane seat a few blogs back… I spoke with an airline employee who told me that the cleaning crew comes on board to tidy up the airplanes between flights….kind of like tidying up your car everyday or so. They DEEP clean ( in the hangar) on a rotating basis ( kind of like getting your car detailed or vacuuming it out yourself). If they had to deep clean planes between each flight it would hold flights up and thus cost more to fly…makes sense to me.
Kitty Boo
August 24th, 2009
9:10 am
Actions speaks louder dans words MJ? You means controlling car companies, giving people money to buy homes and kars? Is that what you mean? We alls getting the “goose”.Da man gives Government Stimulazz.
ATL06
August 24th, 2009
9:11 am
MotherJaneGoose what the heck does the presidents vacation have to do with this topic. You say you didn’t want to hijack the post but that is clearly what you did. Why start questioning the Presidents vacations now he is not the only President to have taken a vacation.
Andrea
August 24th, 2009
9:29 am
I really didn’t want to jump into the fray on the Obama vacation topic but against my better judgement, here goes:
Why is this even relevant? If one spends his own money to rent a vacation home, isn’t that his choice? While it isn’t my reality, I can’t begrudge someone that can do it. I don’t think this is any different from past presidents. Taxpayers paid for all or part of previous presidential retreats (Crawford, TX – Kennebunkport, ME – California – Arkansas, etc.). THIS IS NOT NEWS!
Motherjanegoose – surely, you had to know this would happen. The AJC in typical fashion, has conveniently moved this blog to the front page!
Stan
August 24th, 2009
9:30 am
I use debit card for just about everything. I should probably look at switching to cash for most things (except gas Pay at the Pump keeps me out of the store and away from the candy)
Every President I can remember has taken vacations, and every time people with opposing views to said President comment about it. Remember when the left was griping about Bush spending a month at his own home? It’s always something both sides do it.
motherjanegoose
August 24th, 2009
9:36 am
Many folks I know can discuss two things at once…perhaps some cannot. I will leave now and apologize Theresa for causing trouble…please have fun with the original topic…I hope you have a full day of wonderful comments.
I will check back in tomorrow.
clyde
August 24th, 2009
9:39 am
Carry a limited amount of cash and leave the debit and credit cards home.That way you’ll train yourself to distinguish the difference between want and need.Once you learn this difference life flows along smoothly and the savings account grows.
Never carry a balance on a credit card.
good grief
August 24th, 2009
9:46 am
Kitty Boo, I get it. You’re writing with intentionally mispelled words and attempting to use ebonics because Obama is black. Thats really funny. Hilarious even. Your comic perception of racial issues is quite keen. They should give you a column in the ajc to really utilize your creativity. I’d bet, based on your posts, that you could really come up with some witty material!
new stepmom
August 24th, 2009
9:53 am
THis is interesting as I am trying to learn to budget for our family and have tried several things. I am like one poster that is not in favor of carrying a lot of cash. We have had purses stolen at work (UGH)and it is easier to replace a check card than cash. I have taken all credit cards out of my wallet, as has my husband. I spend only with my check card. I buy as frugally as possible as the grocery and if I do not meet my budget, I make up the balance on a Publix gift card to use when we want or need to buy something a little extra (like we are hosting Thanksgiving this year and just had a B-day party for a friend). We are also saving for some new furniture (we have plenty of his and mine, but nothing that is ours) and I am looking into different ways to save for that since I do not want to put that money into our reserve account. I may try the cash thing some week, but I am not sure that would work for me. GREAT TOPIC!
DB
August 24th, 2009
9:53 am
I mostly use a debit card, and keep track of it as assiduously as I used to keep track of checks. We have a couple of credit cards we are currently paying off, but the one thing I am asking my kids not to do in college is to fall for the credit cards that they throw at college kids, who think they are going to pay them off “next month”, but end up with debt that they just can’t handle. I have told them flat-out that I won’t be co-signing a credit card for them, and if there’s an emergency, I can transfer money to their checking account in two seconds.
With both of us self-employed, we’ve sometimes had to use credit cards to get past some very tight spots (i.e. groceries, not vacations!) Credit is a useful tool, but frankly, at this point, my goal is to drop off the credit grid entirely and not have ANY credit score! :-) It drives me crazy when they hit these college kids with the stupid marketing that says, “Build your credit!” What, build your ability to borrow?!? Why not encourage them to save and not NEED to borrow? Bah . . . this is a soapbox I better not crawl on, today!
Theresa Walsh Giarrusso
August 24th, 2009
10:01 am
I have never used a debit card and I’m wondering if it would be the same as cash without having to carry the cash — I’m not carrying much cash on me but then that has it’s own issues — i’m afraid I won’t record items with the debit card and then my checkbook balance will be all whacked.
Any recommendations on what to do with the leftover money from the week — does it go into a savings jar or just cycled into next week where the savings is kept int he bank???
Cynthia
August 24th, 2009
10:01 am
I carry and use cash. I find that my spending is curtailed when I only have a bit of cash on me. I set a weekly budget and try very hard to stick to it. I did use my credit card about a month ago to get my brakes repaired. I did have to run a balance for two months since I paid 1/2 of the balance each month. I am currently unemployed and trying hard not to get into credit card debt. As I heard the term and live by it as much as possible – Cash is King.
HB
August 24th, 2009
10:17 am
MJG, re: cleaning planes. Yeah, that was my understanding that cheerios could be vaccumed/swept up quickly between flights but that deep cleaning was occasional (so I imagine if someone spills, some will be stuck deep in the cushions until detailing — Oh well). Thanks for confirming.
Greg
August 24th, 2009
10:30 am
I’m going to be quite different from the rest here. I don’t have a debit card, and I don’t want one. The reason is BECAUSE it comes right out of your checking account. My worry is in the case of a disputed charge. With a debit card you’re fighting to get your money back. With a credit card you’re fighting for a charge on the bill, but you don’t pay it until the dispute is resolved. It is a lot like cash with some extra protections in case the card is stolen where lost cash is just that – lost. We’ve gone almost completely away from using cash and using credit cards for almost everything. Since we pay it off every month, and always have, that isn’t a problem.
It sounds like the biggest problem people are having is not buying the “extra unnecessary something” when using a credit card. I guess I’m lucky that I’ve never had that problem. Using cash does sound like one way to keep your discipline in spending. So, use whatever works to keep your spending habits under control.
DB
August 24th, 2009
10:57 am
Theresa, if you mentally consider your debit card as just a “hard check”, it’s easier to make those little notes in your cash register (or your Blackberry, or whatever . . . :-) I don’t use the debit card for anything under $15-20. If it’s less than that and I don’t have the cash — I probably don’t really need it :-)
I’d put part of the leftover money in a separate account (or a jar?) as a savings and the rest in a separate jar for an emergency fund, such as the unexpected new tire or replacing the mailbox that got smashed during the night . . . that sort of thing.
Stan
August 24th, 2009
10:59 am
For those worried about carring cash, nobody knows how much you have on you. Having $400.00 on you does not increase your odds of being mugged.
That siad I tend to get a little weird feeling when I have a lot of cash on me.
TWG, do whatever you want with any left over. Save it, put into the blow money group, doesn’t really matter…just pick what you want to doo and do it.
melissai
August 24th, 2009
11:02 am
My mom is 70 and on a very limited income. Any $ left over at the end of the month is moved to savings. She also joins the Christmas club at her credit union each year and with the $ she pre-pays for a full year of garbage pick up, newspaper delivery, satellite TV, and the flat bill for her electricity. She is very disciplined. I hope to be like her some day!!
Big Poppa
August 24th, 2009
11:02 am
I wish I used the all cash system years ago. I would be much happier. I am currently in debt by more than $38k at rates between 19.9 and 23.9 apr. My “minimum payments due” to the credit cards rival most mortgage payments. I am paying over $8,000 a year in interest charges. Honestly, I have nothing to show for my debts. The groceries I bought are gone, I don’t wear the clothes anymore, my vacations are just memories and my laptop, TV’s, Ipods, video games are no longer state of the art. Be careful and don’t make the same mistake I made.
penguinmom
August 24th, 2009
11:06 am
We use a debit card and keep track of the purchases online. I think it is probably in between credit card and cash as far as limiting your spending. It’s certainly easier than cash but you know that you have to actually have money in the account. With cash, I always feel like I don’t know where it all went when its gone. With my debit card I can look online and see exactly where every penny went.
I would say extra money goes into the savings to be used for those larger purchases that come up that aren’t covered by weekly allowances. (Car repairs, mattresses) Maybe set something up where if you have extra left over every week for a month, you do something special (as long as it doesn’t cost more than what you had left over.)
Just curious, why do you need a new mattress for the toddler bed? We always just moved the crib mattress they were currently sleeping on over to the toddler bed. To me, that’s one of the advantages of the toddler bed. No new mattress needed because their crib mattress fits.
penguinmom
August 24th, 2009
11:10 am
Big Poppa, try a credit counseling service. The one we use, Consumer Credit Counseling, got us deals on interest rates with all of our credit card payments. (one is zero percent) We have one monthly payment to them which they disburse and we will be completely debt free (except mortgage) in less than 2 years.
deidre_NC
August 24th, 2009
11:28 am
i have recently started using only cash also. this is after paying off my credit cards TWICE and now they are almost back to their limits..i have no control when it comes to credit cards…well…maybe i have a little-more than i used to but still not nearly enough. i have kept my cards paid and as i said even paid them off while being laid off and then getting a job making a lot less than i was used to…then i stupidly went and charged them up again. of course i used all my savings too while i was laid off…so now i have NO RESERVES!!!!! that scares me and keeps me in a state of major high anxiety. so now i dont even carry my cards with me. i use the bill payer at my bank to pay almost all of my bills each payday…i use my debit card and keep the check register just as if i was using a check. i get a very little amount out for cash on each payday…thats for incidentals like maybe a snack or drink at work etc…maybe a lottery ticket once in a while etc…when thats gone i have to wait til the nect payday for any more cash….we are eating everything we have stored in the kitchen…barely buying any groceries–i have a pretty good stock pile from when i would use my credit cards for groceries…stupidest thing in the world to use credit cards for they say…it has definately lowered my standard of living…as far as getting stuff goes…i need new shoes for work very badly but i am waiting to see if my quarterly bonus next month is good then i will buy some…i have an insurance clain fixing to pay off for a minor accident my daughter had so i will use that to buy her laptop for college…before i would just put it on the card..and its hard not to because there are great sales on dells now that end before i will get the insurance money….but i know me…if i use the card i will just use the money on something else and boom it will be gone…i am kind of proud of myself for being more disciplined..but i am having to really work at it…i also keep my change in a jar…since ive gone to using cash (or debit card) only i use my change more…but at least im not using my credit cards…if i ever get them paid off again i plan to cancel all but 2 and never ever get them again…..i hate them but they are handy for some occasions…i am so glad the law passed that credit card companies cant offer cards to students under the age of 21….good luck theresa….if you use your debit card and as someone above said write every transaction in a register (it becomes a habit pretty fast) you wont overdraw…..if you keep your debit card in a wallet right with the checkbook register then its easier to remember to write it in….my goal is to start putting all the savings i get using my store cards in my savings account once a week…it may be a while til i get to that point…but its a great way to save.
deidre_NC
August 24th, 2009
11:41 am
sorry i didnt mean to post such a long post lol….yall have a great day!
VoiceOf Reason
August 24th, 2009
11:41 am
@ Motherjanegoose
You’ve lost your mind.
Bill
August 24th, 2009
12:40 pm
Greg makes a good point about credit cards. Credit cards also offer much more liability protection than debit cards. Big Poppa, be careful about credit counseling services. Many are a ripoff, and there is nothing they can do that you cannot do yourself (negotiate).
It sounds like the biggest problem here is impulse control. Cash only may help and it is a simple solution.
Motherjanegoose said “Does he not have friends who could offer him a wonderful vacation retreat that would be less expensive.” There are laws (legal limits on gifts) against that.
lakerat
August 24th, 2009
12:43 pm
I once thought I was interesting, then I found out that I had no friends I should probbly just throw myself in front of a moving bus.
nurse&mother
August 24th, 2009
12:44 pm
Theresa, I am like you used to be before you went cash. I use one credit card (a Disney VISA which gives us money to use at Disney). I pay it off every month. Maybe I should do all cash, but I am relatively disciplined. The older I get the more frugal I get and try to make things last longer. I hope I don’t end up like my husband’s grandparents (who reused stryofoam bowls/plates from take out restaurants).
Penguinmom-just curious….I’ve seen the commercials for debt consolidation. What is the catch? How does the third party benefit from getting your interest rates down so low? I’ve always been curious.
lakerat
August 24th, 2009
12:48 pm
Motherjanegoose stole my husband.
JF
August 24th, 2009
1:04 pm
@Bill – You’re wrong on debit cards. They offer the SAME protections as credit cards so long as they have the Visa/MC logo, and are run as a “credit” transaction (no PIN input). No difference in liability protection whatsoever.
Spank Da Monkey
August 24th, 2009
1:06 pm
This blog blows…
nurse&mother
August 24th, 2009
1:09 pm
JF-this must have changed. One of the reasons I don’t carry a debit card, only an ATM. My bank (many years ago) couldn’t tell me that I would NOT be responsible for any unauthorized charges. I didn’t want to risk my whole checking account when I could use a credit card AND receive benefits.
Bill
August 24th, 2009
1:09 pm
JF, If you are correct, then things have changed
Bill
August 24th, 2009
1:11 pm
One other drawback to debit cards is the hefty fees if you use more than you have in your account. They will let you spend, but hit you with a $35 fee for every transaction over limit.
Bill
August 24th, 2009
1:13 pm
Of course, credit cards have heavy over limit charges as well. I was assuming that most people are closer to zero in their checking account than they are to their credit limit on the cards. Perhaps that is wrong. One thing for certain, cash is much simpler than trying to second guess how the bank is going to screw you next.
Financial Peace
August 24th, 2009
1:23 pm
My wife and I took the financial peace course by Dave Ramsey and I would recommend it to anyone. We have several envelopes that we have set aside for our monthly expenses such as groceries, gas, entertainment, etc. We withdraw the same amount of money every two weeks and put it into the envelopes. This has helped us control our spending habits and we know exactly how much money we are saving each month.
lynn
August 24th, 2009
2:13 pm
JF is correct about the logo. A couple years ago we had someone clone our debit card and used it just enough each week so that we didn’t notice. After a month and my husbands card being declined we noticed that it was being used in areas of GA that we had never even been to and there was over 1k in charges by the time we noticed. The bank automatically credited every single item back to our account the same day I notified them so yes, they’re safe. I still don’t like them though. When two people are using two different cards on the same account it’s almost impossible to keep straight and I manage money (for the most part) for a living and I can’t do it without missing one he’s done or him forgetting that he stopped for gas and not telling me. I even tried the balance online method but some debits take as much as three days before they show up so if someone is living on a budget and looks at their balance online, the debit goes through after the fact and could cause a problem.
gpkbsin
August 24th, 2009
2:13 pm
we only use our credit card. we don’t even know how to use a debit card. keeping cash is too much work since we have to go to the bank to get it. we don’t have no debt and we save plenty because we don’t spend a lot. we are very disciplined when it comes to spending money for useless stuff.. there is none of it in our house.. if there is any, it gets donated and we write it off.
anybody needing help with spending, come to me. spend 1 month with me and i’ll tell you NO so many times when you buy something that you will think of me the rest of your life when you go to any store. i just don’t understand why people have this need to buy useless things. i suppose everybody is different :)
Bill
August 24th, 2009
2:27 pm
Financial Peace,
My in-laws have been using the envelope system for over 50 years. It has worked well for them. From what I have seen of Dave Ramsey, his program is good. It is very basic, and not complicated. I think he teaches you to view your possessions a little differently.
Connie Jenkins
August 24th, 2009
2:30 pm
I have been married 31 years, raised 10 kids and never used credit cards. (Don”t like paying interest). I always pay in cash. If I have to send a payment through the mail I buy a U.S. Postal Money order. Have never understood why anyone lets themselves get caught up in the credit card system. Seems to be a waste of money. If I have money left over then I just hang on to it till I NEED to buy something else.
nurse&mother
August 24th, 2009
3:27 pm
connie, not everyone carries a balance every month. I NEVER do. I NEVER have to pay interest because I don’t carry a balance. I get Disney Reward Dollars that can be used directly at Disney World, Disney Cruise Line etc. I just cashed in $900 in February that I had accumulated for about 4 years (just for using the card for groceries, and everyday expenses).
Theresa Walsh Giarrusso
August 24th, 2009
3:41 pm
Spent too much at the grocery store. bought 2 jars of peanut butter at almost $5 each because we like the low-fat kind. Had one already in the garage — thinking about taking back two jars of pb — also thinking we should switch to full fat because is cheaper — hmmmm — so many variables to consider.
lynn
August 24th, 2009
3:53 pm
Theresa, look at the latest Time magazine report about organic foods and the expense. It changed my thoughts about going organic after reading it today. Very interesting article.
BShepCarlin
August 24th, 2009
4:01 pm
We use a credit card for everything and like Theresa pay it off every month. We go the credit card route as you get rewards from the card. We are big Discover people because we get cash back. Like Theresa (we have a lot in common!) we do occasionally have to dip into savings for unexpected purchases ie…brakes for the car that kind of thing. What I do that keeps us within budget is I keep a running tab in a notebook of all my purchases and the category…grocery, gas, retail, etc. When I hit my budget number, I stop shopping! It takes some getting used to, but if you write your purchases down as soon as possible it gives your a good idea of what you are doing with your money. It requires a lot of discipline but works for us. I don’t like having cash on me because I am more likely to spend it than a card. Odd I know, I think most people are the opposite.
Tig
August 24th, 2009
4:11 pm
I like the idea of utilizing a cash budget but unfortunately I bank with a credit union that only has a ’shared service center’ near me and not a regular branch, and for me it’s not worth it to get cash at $1.50 a transaction at the atm :(
(and of course their hours are smack dab in the middle of my work day so going to cash a check there during a lunch hour would be crazy with street traffic and people)
Tig
August 24th, 2009
4:12 pm
Whoops, forgot to add that I don’t use credit cards normally, just my checkcard that debits my checking account directly.
Kathy
August 24th, 2009
4:30 pm
We have one CC ( a Disney VISA). Other than the bills that hubby pays on line, everything gets charged to the Disney VISA. We stick to a budget (no charging over a certain amount each month), keep meticulous track of it and pay it off at the end of each month. If there are emergencies or things that we need to do that are outside of the budget (this month it was buy a new computer), we charge it as well and then use savings to pay for the “over budget” items. This works well for us because we are very disciplined about our spending and have zero debt. My husband is very good at saving any extra money we have so that we can afford the “over budget” items and not go into debt to buy them (like my fabulous new iMac…..I am so in love with it!). We will have lots of Disney Dollars to use when we go to Disney World early next year. It really isn’t a great rewards program though…..$1 for every hundred you spend. It has taken us a long time to build up a decent reward. We are going to switch to a credit card that has a better rewards program after Disney.
@Connie Jenkins…..you don’t have to worry about interest rates on a credit card if you pay it off every month.
penguinmom
August 24th, 2009
4:31 pm
nurse & mother, the credit counseling place gets a small fee from us every month. I think it’s around $50. There are rip-offs which ‘consolidate’ your loans into a loan with them. I think that’s a bad idea. Ours negotiated with each card separately.
We tried negotiating ourselves but it didn’t work. They’d offer a short term plan that helped for 6 months but then we were right back to high interest rates and not being able to pay the minimum. Often they wouldn’t work with us unless we hadn’t paid anything in months (not good for the ole credit report).
CCCS has been a huge blessing. It’s not perfect but one bill each month as opposed to 5 is wonderful. The amount we are paying now towards credit cards is significantly less than we were paying on our own (even with the small fee to CCCS). And our balances are going Down, Down, Down.
It may not be for everyone but it is a lot less stress for us.
HB
August 24th, 2009
4:34 pm
Is this article you were referring to Lynn? http://www.time.com/time/health/article/0,8599,1917458-1,00.html
Very interesting read — thanks for sharing!
lynn
August 24th, 2009
4:43 pm
HB – yes that’s it! Thanks for posting the link. I thought it was food for though too and you’re welcome.
lynn
August 24th, 2009
4:43 pm
Ooops…that was food for thought….
deidre_NC
August 24th, 2009
6:01 pm
just a fyi…i bank with a credit union and have a line of credit which really is just overdraft protection. my bank wont let me overdraw…if i have used up all of my line of credit it will deny my purchase if there isnt enough in my account. im not sure all bank s do this-but i know a check will go thru and my debit card wont…so i never have overdrafts with my debit card…plus as i said i always write my purchase in the register…at least the amount then fill in the rest later…i write 2 checks a month…all else is paid with my bank bill payer or online…the checks are for these 2 stupid credit cards that actually charge me to pay my bill online…that is the stupidest thing in the world…they beg me in each bill to go paperless yet charge me if i do…grrr….those WILL be paid off soon and cancelled…and yes i know that cancelling a card will hurt my credit…but i am not that self controlled so i will cancel when they get paid…
motherjanegoose
August 24th, 2009
7:37 pm
Good tips today.
Clark Howard once mentioned a way that you could see which credit card pays you back and what rewards program would be the best….I cannot remember it.
I use a Hilton Honors American Express Platinum and have over 700,000 points now, which translates into the possibility of taking at least 4 folks on a cruise for FREE ….IF we do not go in the high season. We used 120,000 points in April to stay at the Embassy Suites in NYC for free…3 nights.
I have had this card for years and pay the balance in full every month. A friend’s son ( who is an accountant) e-mailed me once to introduce the card ( they run referrals sometimes).
I replied that I already have the card and he told me it was the best card for reward points….if you
want to redeem them for travel. He and his wife stayed 5 nights at an upscale Hilton resort in Maui for FREE on their points. I used Discover previously and the perks I got from it were terrible but if you do not travel, then maybe their rewards are better. Whenever Discover calls and reminds me that I am not using their card, I tell them why and the salesperson usually asks me to give him/her the name of the card I use.
If you do pay your card off in full, I think the rewards points are a benefit….anyone else?
Isn’t this a way to “save” for a vacation or maybe earn gift cards to share during the holidays.
I have to have credit cards to travel….can you even rent a hotel room or rental car with cash….I do not know. I do not worry about the interest rates, as I do not carry a balance.
motherjanegoose
August 24th, 2009
7:38 pm
As I mentioned earlier…the AE is used for my business expenses.
Sunshine
August 24th, 2009
9:43 pm
Dave Ramsey’s book is great. He teaches you how to save $1000 for emergencies (I keep reading about how ya’ll have them!) and how to use the snowball effect to pay off your debt. He was a millionaire twice so I’d check his book out or his website. :-)
Henry
August 24th, 2009
10:51 pm
I live on the cash basis, and do it for the whole month. I have a savings account at a credit union; I withdraw exactly what I need to pay my bills and my purchases for the month. I leave the rest in the account for later in the month.
I take my cash to purchase money orders for my bills and mail them. I shop in the bulk and it lasts for more than a month. I have been doing this for almost two years. I have paid off several of my credit cards, and very close to finishing that by the end of this year. I have a house note, and car note. I have two small children and I have to budget everything. If an emergency arises, then it comes out of savings.
I used to bank at Wachovia but I took my business elsewhere because they would wait 2 days to deposit my checks, even my direct deposits. The fees would wipe out my account, especially after going to the grocery store. After a year of dealing and pleading with them to actually put my money in the account and then pay the bills…instead of racking up the fees. I have been with the credit union for over 2 years and haven’t experienced any fees yet.
I put money on a gift card while I am in walmart or sams, and then I can stick the card in at the gas pump w/o having to leave the pump. This works well when the kids are with me. I have been doing this because of a job loss 18 months ago.
Mom
August 26th, 2009
2:49 pm
I put absolutely everything I can on a cash back credit card and pay it in full every month. I have zero debt, a healthy savings account, paid for the each of the 3 cars (2 brand new) I’ve had in my lifetime in full at the time of purchase and paid off the mortgage on my house in about 10 years. I did all of this as an only parent with an extremely modest income (around $20K since I’ve chosen to work from home for the past 5 years). We live a frugal but very full life and want for nothing.
I rarely use cash. I’m digging deep at the moment and cannot come up with the last time I used cash. The last time I wrote a check was in Sam’s over 7 months ago. Though, I do know that I’ll be writing some checks to the school now that the year has started. I do not have a debit card.
Credit cards are infinitely better than debit cards. With a credit card, any mistakes are resolved before a penny comes out of my pocket. With a debit card, money is taken directly out of your account (potentially racking up overdraft fees from the bank and returned check fees from the vendor and preventing you from accessing your own money – what happens if it’s a weekend or holiday or after hours or you’re on vacation!!) until mistakes are resolved…maybe, eventually…on your dime (many dollars, actually) and your time.
The only reason I can see for anyone to resort to paying cash is if they have self-control issues. If you have to have the physical reminder of the actual cash in your purse to determine whether or not you’re going to purchase something, you’ve got way bigger problems than deciding whether to use cash or credit.
Clearly, Theresa, you’ve admitted to having self-control issues. You openly admit that you buy things on impulse. You and your husband both apparently spend money mindlessly. While forcing yourself to use cash highlights the wasteful spending habits you have, it cannot magically make you gain real self-control.
Why would you use cash at the gas pump? Are you going to overfill your gas tank if you use a credit card instead of cash? Are you going to mindlessly drive around and needlessly burn more gas if you know you paid for it with a credit card instead of cash?
Why would you use cash at a grocery store? Are you going to pick up junk food or other overpriced extra stuff you don’t need/won’t eat because you’re going to use a credit card instead of cash?
There are many protections that are in place when you purchse with a credit card. You lose those protections when you use cash, checks or even debit cards (contrary to popular belief, the protections on a debit card are NOT as extensive as they are on a credit card).
And, for those of you who stuff envelopes full of cash at home – what happens if your house is destroyed or burglarized? It sure sounds like you’re out at least a month’s worth of money. Don’t think it can’t happen to you. I have two friends who have recently lost their homes due to fire and several who lost theirs in a tornado or other natural disaster. I have had my house burglarized twice. Trust me, they KNOW all the hiding places – your cash would be gone. Then what would you do? Insurance companies only replace cash up to a certain amount (typically around $200) and that’s typically less than the deductible amount.
Stay clear of those debit cards, Theresa. A simple human keying error quickly turns 100.00 into 10000. Won’t that be fun to clean up after the fact? I have friend who went through that nightmare. Months later, hours and hours of his time invested and he’s still not been refunded all the fees…
Money and Relationships
August 29th, 2009
5:41 am
At times couples are squabbing over money matters and their relationships affects
a lot because of this. i too was one of the victim to this and i was adviced by one of my friend to get rid of this and i did …
i thought the same way as you did a few months back when i and my partner had some issues on money matters and our relationship seemed like it is gonna sink
and i went into depression and only on one day my friend made me realize how i could overcome my issue with this.
And it worked for me and now, we are a happily living couple.
Money and Relationships
Danny
September 1st, 2009
11:22 pm
We also don’t have a problems with deb, just a problem with spending. We sometimes spend over $400 per month eating out. I know for us that’s entirely too much and I think an all cash system for the budget category would be great for us. We could easily cut that in half and increase our savings $200 per month. It’s something I would like to try in the coming months.
Important Steps to Financial Success