thevicenarian.com

Spending too much? Try cash

Posted by Tad Johnson - Apr 21st, 2008 at 21:04

First, a short story :

When I was a sophomore in high school, I wanted a CD burner very badly. This was back in the late nineties, and CDs were still a hot commodity (as the iPod was still just a glimmer in Steve’s eye). I went to BestBuy with some friends and found an open box burner for a [then reasonable] $130. I didn’t have a credit card, so I went to the ATM and pulled out seven crisp, $20 bills. I paid for the drive in cash and walked out a happy man.

Holding that much money ($140 was a lot of mowed yards) in cash makes you appreciate the amount–much more than a quick credit card transaction. I still spent it, but it made me really think hard about the purchase. And, it made me really value what I had bought (I made legal copies of all my store-bought CDs, naturally).

This is a personal finance hack that you can use at any age. If you’re having trouble tracing down where your money is going, try switching to cash for awhile. You get instant feedback on your spending as you watch your wallet shrink.

I’ve written before about the benefits of using credit cards, but that’s only after you’ve mastered the art of personal finance and budgeting. Going on a cash-only plan for a few weeks is the perfect crash course to get your finances back in shape.

April 21, 2008 | In personal finance, shopping, vicenarian |

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I normally swipe my debit card for everything, only using cash for parking decks and restaurants that won’t take cards.

While I was in Europe earlier this year, however, I found that carrying Euros was far easier than hoping that a store would accept a card, and I was amazed at how much more conscious I was of what I was spending.

I’m normally a tightwad, so I rarely worry about going over my limit — with 150 Euros draped around my neck though, I could literally feel the impact of every three or four Euros spent (especially via coins).

l

Comment by Glenn — April 23, 2008 #
Cash only works if you’re pretty sure you won’t get robbed.

Comment by jrandom42 — April 30, 2008 #

Spending too much? Try cash

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