Welp, I know with that title I’ve just opened a can of worms. I can almost feel the virtual tomatoes hitting the screen. DUCK!
I know the arguments. I hear them all.the.time.
“I use my credit card safely!”
“I paid for my whole vacation by playing the credit card system and earning cash back!”
“I can’t use cash – I’m safer by using my debit card…cash burns a hole in my pocket.”
Having used a cash budget system from day 1 of our marriage, I have to say that I’ve heard every single argument out there for not using cash. So, today I’m going to tell you WHY cash is better than any plastic card you can swipe.
First, let me tell you that I KNOW you’re going to argue with me. I’m going to state facts and studies. But you’re going to say that you don’t fit that category. And that’s fine. But also realize that MOST people do fit into the category of not being able to behave with money. So when I cite stats, I’m telling you what studies and surveys have told humankind to be true.
You’ll spend less when you use cash.
This is a proven fact. People spend less when they use cash. It hurts for that money to leave your hand. It makes you think twice when you hand it over to a cashier. It hurts worse to see that money dwindle from your envelopes. (here is the wallet I use) It’s PERSONAL.
A piece of plastic isn’t that personal. It doesn’t even have a picture of a person on it (usually). It can’t be colored on or have a chain letter written on the back.
Studies show that when you eat out and use plastic, you’ll spend about 47% more than if you used cash.
Let’s face it. If you have $5 for lunch in cash, you have $5 in cash for lunch. Period. They’re not going to give you $8 worth of food and let you leave without paying for it. But maybe you have a $3 cushion in your checking account, so you swipe that piece of plastic and get the apple pie.
You cannot spend more with cash. Well, you might. But chances are, you won’t do it more than once. If you have $400 for food and you blow through it the first week because you have cash – then you have to make do the rest of the month. Chances are high that you won’t do it again next month. It’s called learning responsibility for taking care of money.
You can’t play the system.
I know lots of people are convinced they are “playing the system” with their credit card – earning points and paying their bills off each month. But the truth is, you’re not playing the system. If you were, these credit card companies wouldn’t be SO successful.
Barry worked in the credit card industry for years. He learned that the majority of people cannot behave with plastic. While you think you’re doing well, there are millions of other people suffering because they tried to “play the system” and it backfired on them in a bad way.
Sure, you can charge it all and pay for it later 100%. But what if…what if all of your cars die at the same time? What if there is an accident and you end up with more medical bills than you can count? We’ve seen it happen. And all those people thought “that won’t happen to me.”
Cash is safe
Sure, you can get robbed. Chances are, a robber on the street doesn’t know you have a cash budget in your pocketbook. And while your cash might be gone in an instant, the time you’ll spend on the phone cancelling all your credit cards will be harder for you to swallow than $500 stolen.
A special note: we are not completely anti-plastic, lest you think we are hypocrites. We do have a debit card which we use to purchase gas with (budgeted ahead) and online purchases (paid for from our budget). It’s also what we use to book vacations and other things online. The bills that we cannot pay cash with, are paid directly from our checking account through a bank program. There is a time to use debit, but we prefer cash. Debit is a million times better than credit because it’s your actual money (do not include overdraft protection).
We also have a credit card. GASP!!! I know, you’ve already passed out on the floor. But the truth is, we don’t use it to “play the system” or “earn cash back.” We have ONE credit card that’s used solely for large purchases that Barry must make for his work. The company he works for only reimburses for travel expenses which can easily go into thousands of dollars a month. When a purchase like that needs to be made, we do use a credit card, and then pay it off immediately when reimbursed. Chances are, he won’t “overpurchase” when someone else is footing the bill. 😉
HOWEVER, we have proven that we don’t even need that. We’ve only had it in the last year, and went 11+ years doing the same thing without one. And it it went away tomorrow, I’d be Jim Dandy fine and not blink an eye.
Why do you think cash is better than plastic?