Pay With Cash & Save Some Scratch

By Vincent Mortensen

Credit is everywhere.  Credit is also very convenient.  We pull out Imageour VISA cards, swipe it for our purchase and get along with our lives.  We also use credit to purchase items we want now such as fancy clothes, video game systems, and new cars. 

It is noted on average that consumers will spend 12 to 18 percent more on purchases with credit and debit cards versus using cash.  Why exactly does this happen?

Studies have been performed that show it is mentally painful to spend cash.  Receptors in the brain fire when you pass on that twenty dollar bill you worked so hard for to a complete stranger behind a register.

For example, you just had a nice $10 meal at a restaurant and it’s time to pay upfront.  With ‘plastic’, we hand over our card, they swipe it, we sign the receipt, and that’s it.  Sometimes, we barely realize we just spent money.  Now switch the cards with cash.  You pull that nice, crisp ten dollar bill out of your wallet and give it to the person behind the counter.  A frown hits your face as you say farewell to “Uncle Alexander Hamilton” forever.  Maybe next time, you won’t order the $3 hot chocolate because you want some “George Washington’s” back.

Naturally, it’s easier to use direct deposit programs offered by banks for bills like rent and utilities, but everything else like entertainment, groceries, clothing, hygiene products, etc. can be paid for in cash.

If I’ve convinced you to give cash a try, I recommend the Envelope System.  The Envelope System is simple.  Create different categories such as those mentioned above and put cash in each envelope.  For example, put $50 in your monthly entertainment envelope.  If your friends invite you to a concert, the tickets are $20 but you only have $11 left in that envelope, you’re not going to the concert.  It’s that simple.

Cards are convenient but cash will always be king.  If you would like any more information on the Envelope System, check out the website below.  Good luck!

http://www.daveramsey.com/article/dave-ramseys-envelope-system/lifeandmoney_budgeting/

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