Over the last five years we have always mentioned how we write out our monthly budget, and set our categories aside for spending with CASH in each envelope.
It was NOT always like that ~ 10 years ago, our mail was full of bills, loans and payments ~ we lacked the discipline to write out a budget and stick to it. And it showed, because it was the LITTLE things that caused us to spend TOO much on things that we truly did not need.
I think in reality… many people rely on payments — so they truly CAN afford anything. Am I right?!
And that is the truth: You CAN have anything you want – in reality, all of us can. You can have Trips, Cars, Jewelry, NEW Clothes, a HUGE Flat Screen Television – even a NEW Boat, ATV … or even a Camper. As long as you are willing to make payments. Right?!
If you are willing to finance your WANTS and make payments you truly CAN have almost anything you want – without waiting. But I’m almost certain that is not what everyone wants, or is it?
When I look around I see SO many people SWIMMING in household debt ~ it truly has swollen to an enormous amount ~ we finance college, which takes us years to pay off. We finance cars, because we get easily bored with the vehicles we have… we encounter medical expenses, unemployment and emergencies, and with little or no emergency fund, the need to finance seems appealing because it still allows us to get by… yet still get what we really want (and may not want to wait for…)
One of the ways to get serious about your financial lifestyle is by making that decision to STOP the cycle… one way to do that is to pay cash. Paying cash can be painful – but it’s a true game-changer if you want to get ahead financially.
Paying in Cash is Painful…
Paying for your items in cash really is a game-changer – I’m convinced that it DOES help you stick with a budget better than ANY other method. Considering 40% of Americans have less than $500 in their savings, we can only assume that many do not have the discipline to put even small amounts of money away ~ which leads me to say that those same people would not have the discipline to use a credit card as their method for staying within a budget.
Here are THREE results of paying in cash versus plastic…
Paying in cash makes you consider the purchase
No matter if that item is BIG or SMALL, the buying experience is completely different. You have NO CHOICE to consider what you may pay on a monthly – it’s what you are paying as a whole.
Paying in Cash Forces you Evaluate your Purchases
When you are sitting at a car dealership, that big ticket item seems to lose it’s appeal when the price tag of $20 – $30,000 comes into the conversation. Especially when you are spending cash. For many, financing is their option – but that’s also an option that may NOT help you spend less.. factoring in depreciation and interest, your 6 year old paid off vehicle MAY now sound like a more attractive option. Right?!
Paying in Cash Keeps you OUT of Debt
When you spend your hard earned green, you’ll stay out of debt in the first place. Learn how to set money aside; learn how to be content with the things you have. Make do with what you have instead of making decisions based on your emotions. It’s a GREAT feeling when you are debt free & don’t have to rely on ANYONE else.
Our culture has definitely twisted the meaning of affordability – so many people think that being able to “afford” something means that they can cover the monthly payment.. provided they don’t lose their job or have an emergency.
When in reality, the term “affordability” should mean your ability to pay cash, without putting yourself in a pickle financially.
Nicely said. This made me stop and think. I am the person that goes shopping w/ very little cash in hand and 99% of the time swipes a card. Fortunately we are not part of the 40% you mentioned, have paid off our home and only have 1 car payment, but after reading your article you made me realize I waste money on things we don’t really need. And I thank you for that as I was making huge shopping lists for Kroger, Meijer and CVS because the deals were soo good this week.
Paying cash will certainly keep one debt free.
Never shop at Costco or Sam’s on Saturday and Sunday at 10:30 a.m. — 3: 00p.m. During the time period listed applies to most stores.
I was just telling hubby today the first of the month I’m re-figuring the budget now that he JUST finished college. We have been lax the past few months. We need to get back on track. Especially since he had to do a good chunk of his college with student loans. We don’t want to be paying on them for the next 30 years. We agreed 6 months ago that when he graduates we won’t be going out and buying a new car before we can at the very least put down a hefty down payment if not pay for it outright, unless the car dies before then and we have no choice. Our current one is 10 yrs old. I love the idea of going to cash budget. I think it would certainly help prevent over spending because “we might need this in a couple weeks.”
What me and my husband do is shop at Amazon for pool supplies, computer ink, and whatever we absolutely need, we give ourselves a limit, which is anywhere from $100 to $400. Amazon gives you 6 months to pay it off interest-free. I have been doing this for about 5 years and never had to pay interest. We don’t shop for frivolous items, only items we actually need and the shipping is free. So I feel like we’re charging, but without the interest and we can pay if off in a 1,2.3 or the 6 months that is allowed. It has really been a life savior in many occasions, like the time we need a pool sweeper and we didn’t have the cash, but was able to get it through Amazon for 6 months interest free!