I very rarely carry cash anymore. There are just so few things these days where I actually need cash (cover charges are the only thing that come to mind right now, and tips at the airport) and ever since I got out of credit card debt, I’ve been responsible about using credit cards so that I always pay off the balance.
Actually, in all honesty, I haven’t been irresponsible with credit cards since I got serious about paying off the credit card debt in the first place. When you are getting out of credit card debt, shred those cards and only use your debit card. It’s the best way I’ve found to get out of debt. But once you’re out of credit card debt, then you can start using credit cards again. Make sure you find one with rewards, because the credit card companies make money on every transaction. Don’t feel bad about going through a few rewards cycles — if you know how to play the game, then you can “outsmart” the companies. Just don’t pay interest or annual fees. Period.
Why does it feel like cash gets spent so quickly?
These days, the only reason I ever have cash is when my dad quietly slips me some (and I always appreciate it, thanks Dad!) and no matter the amount, it always goes so fast. Lightning speed. Lickety split. A half day will go by and I’ll have gone to the gas station and the grocery store, and come back with four dollars, after starting with $100.
But since the cash is extra, I use it that way, and I trick Mint into being proud of me for only buying two tanks of gas after driving 600 miles in a month.
Otherwise, nope. All on the card, every month. So I can track it.
The envelope system would be TERRIBLE for me because cash always looks like so much money. I would look at the envelope and say, “WOW $200 for groceries? LET’S GO.”
Some say that having cash makes you accountable, and that swiping a credit card is easier to forget. I am the polar opposite — cash makes me feel like Richie Rich and the credit card makes me much more deliberate.
Using cash for good
That said, there are some definite times where cash truly is king. These include:
- Giving something to the homeless person who stands on the side of the road (smaller bills are better!)
- Paying $6 cover charge for 80s night (even though you could easily pay that back by buying the person who does have cash a drink!)
- Big group dinners where splitting a check is hard — throwing two twenties toward the bill requires a lot less thought
- Slipping some to your daughter when she comes through town (ahem!)
So, I will happily take cash, but I am not the person who gets cash out at the grocery store, or when depositing a check at the bank. I like the security of credit cards — that I would not be very sad if my wallet got stolen (except that it is an awesome wallet that was once a cigarette holder and I would be sad to lose that!) because all it would take is one phone call to get things straightened back out.