Replies to This Discussion

Permalink Reply by thehuhman on August 4, 2009 at 4:12pm

I don't use credit cards, and I use a debit card, instead of cash. I check my balance on-line every few days... and no surprise at the end of the month.

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Permalink Reply by Jason D. Powers on August 4, 2009 at 4:39pm

I agree with the first respondent wholeheartedly. I used to carry cash with me all the time, but I made the mistake of letting that constantly available cash in my pocket deter me from making wise spending choices. I'd be at the grocery store getting essentials, see something my stomach craved on sale, and buy it becasue I knew the cash I was carrying would allow it, even though I knew I probobly wasn't going to eat or use it all. then, later on when some necessity cost would come up, I'd find myself short and have to withdraw more money and thus the cycle would restart itself. What worked for me was giving myself basically an allowance of sorts: I knew it took anywhere from $25 to $30 to fill up my gas tank and that amount usually would last me a little more than a week. So I added that along with my other calcualted expenses for every two week or so period and then added an extra $30 or so to it as a cushion (I'm being vague because these are my own personal expenses and their amounts most likely are much diff. from yours). this then became my set amount that I had to make due with twice a month. Just a warning though: The only times strategy doesn;t work is when an unexpected payment or expense comes up (holiday gift, speeding ticket...), which Is why I am also an avid savings guy. Well, hope this helped at least a little bit.

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Permalink Reply by Don Davis on October 23, 2009 at 11:03am

I carry both, but have had to learn to discipline myself. At one point, I carried nothing but cash and found myself constantly short, so I started carrying a credit card, and the stress level was way to high. I now have cash in my wallet, between $100 and $200, and a credit card. Since I have stated carrying both, and learned to discipline myself, I have found that I will have the same $100 in my wallet for a very long time. Also, the credit card is only for significant purchases. I know that it costs me $30 a week for gas, so I seem to be costantly replacing the $30 to $40 at the front of the wallet, and that is as far as I make it into my cash.

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Permalink Reply by G.M. Schooley on October 16, 2012 at 2:01am

Agree with you Don, it is a tough balancing act. Requires a great amount of discipline and practice.

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Permalink Reply by Zach Bacik on August 4, 2009 at 5:25pm

As much as I'd like to support the manly notion of carrying ample cash, it's just not terribly efficient or practical these days. There are many reasons to use plastic. For instance, some places don't prefer or even don't take cash any more. Hotels, rental car agencies, and many other places require a credit card to be on file. Credit cards often expedite the process of payment, and they make the cashier's job easier. When you have a credit card, you can often get some sort of a bonus, such as cash back at the end of the year, frequent flyer miles, etc. Also, it's easier to review your purchases with a credit/debit card through online banking.

I still carry more cash on me than most. Right now, I have $78 in my wallet. Yet, I'm going to start cutting back. Why? Because I find that when I have cash in my wallet, I look at it as free money and am more likely to spend it. I feel like I can buy things and deal with the sacrifice right then, and as such don't have to dread paying it off later. That is why I generally only use cash to pay for cheap things, such as a case of beer from the store or lunch at the local Vietnamese sandwich shop.

A couple weekends ago, while on the way back from a backpacking trip, my friends and I stopped at a gas station for cold drinks. I grabbed a Pepsi, handed the cashier a $10, received $8.something back, and headed out the door. My friend grabbed a Pepsi, swiped his card, waited for authorization, signed his named, took his receipt, and then headed out the door. It took much longer than my transaction. As we all hopped back in the car, I turned to him and said, "Josh. You don't have two dollars on you?" "No," he replied, "I don't carry cash. "Asshole," I muttered, and then proceeded to tell him why he should repent of his non-cash-carrying ways.

In the end, I feel it is important to have enough money to pay for the little things, but purchases over $20 warrant a swipe of a card.

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Permalink Reply by John Clanton on August 4, 2009 at 5:41pm

Although I wouldn't call my friend an asshole for using a credit card for a 2 dollar soda, I think using a credit card for a single soda is pretty annoying. To that end, I think of myself as an asshole when I'm buying a Slurpee and swipe my card for it. Sometimes I'll get cash back to make myself not feel like that tool that used a card for a 2 dollar purchase.

I find that if I have cash, though, it is like "free money" for me. That means I'll spend it on something I probably wouldn't have if I had to use a card. I use my credit card or my debit card. The thing is that I never use a credit card as a credit card. I always pay it off at the end of the month. If I can't, I won't buy it. That's just me though. It helps me not get into debt, that is for sure.

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Permalink Reply by JAG on August 4, 2009 at 8:00pm

I try very hard to not use cash because I find that I can't keep track of my cash purchases like I can when I use my debit or credit card (I only have one of each). I use mint.com to track all of my spending and also how much money I take out in cash but I never keep track of how I spend that; it is just for anything and I keep it to a minimum each month.

I carry a small amount of cash normally between $30-$40 in my wallet, normally small bills $5s and $10s. That is for paying people back when they pay for some thing; I am a college student so this happens all the time when we go out to eat. I have also heard that this is better then not carrying any cash in case you get mugged because they may not believe you when you tell them you don't have any cash.

I also carry some emergency cash on me (not in my wallet) and in my car, in case I get stuck somewhere and need some cash in a hurry or lose my wallet.

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Permalink Reply by Jamie Q on August 5, 2009 at 11:57am

My wife and I use a cash-based envelope system. I have an envelope for auto insurance, life insurance, garbage service, auto maintenance...anything that requires a large payment periodically throughout the year. Each payday, I withdraw a calculated amount of cash and put it in the appropriate envelop to await its corresponding bill. And no, I don't feel bad about the $1 that I've lost in interest over that period of time...

My wife carries an envelope in her purse, which contains our grocery/miscellaneous budget for the pay period. I also leave a buffer in the checking account for a few un-budgeted treats on the debit card (just to give my wife a thrill when she doesn't have to cut into her grocery budget).

I like to carry $10 to $20 cash in my wallet for a Mountain Dew here and there, but I would agree with the other guys on this thread that such cash feels like free money; nothing to record in the checkbook, no interest, just the here and now. Sometimes too easy to spend. For me, it's harder to spend on the debit card because I'm not always sure where my balance is at (without pulling out my checkbook, which is rarely right on my person).

For the medium-sized "extra purchases" (unexpected dinner out with friends, that must-have deal on eBay, hotel stays, large home improvement projects with loose budgets, etc), I've had a tendency to whip out the ol' Visa credit card. I almost always have the balance paid off before it accrues interest, and it's so much easier not to have to worry about the money at the time being (especially with friends and projects).

However, I've recently had a change of heart where these devil cards are concerned. With the economic downturn, the credit card companies are getting desperate and turning on their customers in order to survive, regardless of credit scores or payment histories. My CapitalOne rate went from 7.9% to 17.9% overnight, right after a huge short notice family vacation from Montana to Nebraska to visit an ailing grandmother. With a recent do-it-yourself deck project already on the books, this was the first occasion in which I allowed my balance to creep up higher than I'd admit to here, but I had no idea that my rate would more than double with such a balance. Now I have to pay off my original balance plus a 142% increase in interest! CapitalOne assured me that it had nothing to do with my credit score (which is excellent) or my payment history (which is flawless); they'd just decided to screw me in order to stay solvent.

I guess what I'm trying to say is that I no longer feel comfortable trusting credit card companies with my credit. Once my balance is paid off, my CapitalOne will be shredded; we're already back on a cash-only system, with the exception of a Costco American Express for gas (cashback rewards, you know?), and that one gets paid off out of a cash envelope for "gas" every month.

Wherever possible, pay with what you have, not with what you intend to have in the future.

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Permalink Reply by Brett McKay on August 6, 2009 at 7:40pm

I've tried the envelope system on and off and I'm a fan. But we usually just do it for things like gas/groceries/entertainment and such. What do you do with the cash when your insurance bills come in? You still have to write a check, right?

I actually feel like I'm less likely to spend when I carry cash. Cash to me is very tangible, so I feel like it hits home more when it's leaving my hand. A credit or debit card is too painless to me. Just a little swipe and money magically disappears from my account. I still use a card of course, but I prefer cash.

I've also been carrying cash more since being up in Vermont. A lot of little restaurants and farmer's stands, don't take plastic and there's nothing worse than eating a meal out and then realizing they don't take cards and you don't have cash.

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Permalink Reply by Jamie Q on August 6, 2009 at 10:14pm

When it comes time to pay for something like insurance by check, I just deposit the amount of the bill from the envelope into checking, then write the check. It's also nice to have a little extra in the envelope because of my slight over-budgeting.

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Permalink Reply by Patrick D on October 23, 2009 at 10:46am

Studies show that most people spend less cash than on credit:

http://www.livescience.com/culture/080907-cash-credit.html

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Permalink Reply by kyle p on January 23, 2010 at 5:35pm

I feel the same way about cash being tangible. The biggest pro is getting a discount when you buy big things in cash furniture electronics magically a salesperson 80% of the time can do a little better for you on the price. The green back means business.

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