HomeDebtI hate cash

I hate cash

Screen shot 2009-12-03 at Dec 3, 2009, 10.10.43 PMHave you heard people say “Don’t use plastic because you tend to spend more money when you do.”? That is another piece of financial wisdom I have decided to ignore. I never carry cash on me, and when I do get some greenbacks, I take it straight to the bank to deposit. A lot of PFers, Dave Ramsey included, preach the wonders of being on a “cash only” system. Their main argument is this: People tend to spend less when they pay with cash because giving tangible money tends to ‘hurt’ more than swiping a card.

I am absolutely, positively, 102% against the ‘all cash’ plan. It just doesn’t work for me. I’m a pretty disciplined dude, but dollar bills are my kryptonite. They sit in my wallet, taunting me, whispering from my right butt-cheek “Hey Ninja, why don’t you put me to use and walk over to Rite Aid and buy a tub of  ice cream?” Seriously, cash is evil. If I have it on me, it will most likely be spent on unnecessary, unbudgeted, and unsmart things (I love making up words).

For me, it ‘hurts’ a zillion times more to put it on my credit card. I pay my CC balance in full each month. Do you know what that means? I get to watch the damage accumulate over my 30 day billing cycle. As the balance grows, I become more and more frugal. Paying between $1,000 to $1,500 each due date, totally motivates me to minimize my spending so I have to pay less on my CC balance. Seeing the damage in it’s entirety, as oppposed to incrementally, influences wise spending choices.

I’ll be honest. I don’t have the discipline (or the desire) to work an envelope system. With the envelope system, you put X amount of cash in the “groceries” envelope and use that as your guide for the entire month. If you run out of grocery money, you starve (or borrow from another category envelope). If you have the discipline to stick to your budget ALL OF THE TIME, than the envelope system is definitely something you should consider. But if you haven’t noticed, I’m kind of a bada$$ and I sometimes like to spend outside of my budgeted parameters. Envelope system=good for people who have a lot of discipline. Envelope system=ineffective for 99% of the US population.

What about you all, Do you prefer using cash or a card? How much cash do you keep on you at any given time? Do you think you spend more when you swipe? Anyone out their like-minded and struggle to keep cash in their wallet?



  1. I also have to say, I really do not care for this IntenseDebate plugin you have on here. Having to click on a link in an email in order to subscribe to comments is really… well, annoying.

  2. Yes, this is how I feel too! I use my credit card for everything and then pay it off at the end of the month. And I'm the same way, if I have cash in my wallet, I tend to think of it as "free money" and use it all up. That being said, I do like to have around $40 in my wallet for emergencies. Love your blog.

  3. I use credit card and some cash. But track the balance of the credit closely. That is just because some places do not take credit cards! Besides some credit cards offer cashback on purchases. Free money woohoo.

  4. Agreed! Agreed! I absolutely hate the cash system. When I was first figuring out this financial stuff, I tried it out and it totally messed me up for a whole month. I guess I just don't have any self control on my spending and keeping up with receipts. I use my debit card almost all the time (except for big purchases which I use my credit card for point). My checking account has a certain number in it and when it's gone I know exactly why and where that money went based on my debit card. Works much better than the cash system ever will.

  5. Whew… finally could get your site to load! =)

    I did the cash only system in grad school and it worked GREAT for me. The trick was to pull out from the ATM what I needed for the month and to hide the ATM card the rest of the month. Then I separated out the money by week and yearly goals. So I go around $80/week and that was it. When it ran out, it ran out. For me, in grad school when I had no money management skills, this was the best thing for me. (You have to understand, I was living on $1800/month and paying $700 in rent, there was a very, very small margin of error – so the cash system made it so I knew exactly when that 0 balance was being reached)

    Now I do things very similar, but I just have an account that my "spending money" goes in to with ING. I can't overspend on this account (if I get below $0, the card is denied). I get fresh money in it to use every 1-2 weeks. And that's all I get. It is the same principle I had with my cash only system, but with the security of the card. And like the cash-only system, I don't care where the money went. If I choose to spend it all on one meal, so be it. It is my spending money that I've budgeted for and I'll spend how I want to! =)

    I would NEVER be able to pay for everything with my credit card. I just am not that disciplined. I admire people who are, but I definitely am not.

    I think that the key is finding out what works for each individual person. For me, the cash system was a LIFE SAVER. It kept me on track and on budget. For others it is just annoying. Some are fine with putting everything on their credit card, some people go wild if they even have access to their credit card.

    To each his own, and if your method works for you – so be it. =)

    • Actually, now that I reread this again – I could keep within $1000-1500 on my credit card.

      However, my budget for "spending" during the month now is $600. In grad school it was $400. These are much smaller values – so (at least to me) it is easier to just have assurances that I won't go over.

  6. I haven't really thought about it from a spending perspective, but I just feel more comfortable carrying one card on me rather than cash.

    That said, I hate Cash. I'm just like you. I don't like it sitting there, in my wallet, looking at me. WHAT ARE YOU LOOKING AT CASH? YOU WANNA START SOMETHING? So, in order to keep the negativity to a minimum, I just carry a card around. Unfortunately, I'm always that friend at group outings that never has cash and always puts in her card. But then that leaves me with cash in my hands and the vicious cycle begins again.

  7. I like getting rewards from my CC. And everytime I use my debit card, $1 is transferred to my Way2Save account (Wachovia) at a 5% interest rate. Those two factors make plastic sooo much more attractive than cash.

  8. I know a family that uses the envelope system and it works absolutely beautifully. I've never tried that one and am pretty sure it wouldn't work well for us. My husband is like you, though — if he has money in his wallet, he spends it. Period. I get anxious about the CC balance (we pay in full every month), so I use combo card and cash, and debit card. Hmmm — we're kind of all over the place, I guess. But with a freeze in salary for him, and a cut for me, and college bills that non surprisingly are going up and not down, I'm trying to really get serious about managing debt and trimming our debt. I'm pretty good about finding little ways (like overpaying the mortgage and the car payment). But now I'm looking at a book about debt reduction, "The Debt-Free Millionaire," by Anthony Manganiello. He has a section, in fact, about the "fun" of instant gratification when you buy something with a CC, but then reality hits when you get the statement. Hhe has an "anchor management" strategy to remedy this so you become excited to pay bills instead of terrified. This is a big one for us — as our CC bill tends to be high!

  9. I am very ADD at times. And I absolutely must use a card for my spending. It used to be a debit card but now I use a credit card and pay off the full balance each month. This is essential for me because I need a record of where my money is going and how much I have left. I know what I can afford to spend each month and never go over that amount. I also use mint to help me categorize and make sure I am not going over budget in any area. I can log into my account each morning and see exactly where I am at. I also get a text message if/when I go over budget in an area. Basically, my budget runs itself and I don't have to spend a lot of time or energy because I use the plastic. All of the boring tasks are done automatically.

    I also suffer from the same cash affliction. Cash burns a hole in my pocket like you've never seen. It is a combination of a ton of small purchases and before I know it, I am wondering where $40 went off to. I've panicked before because I thought I had been stolen from until I calmed down and realized that it was all accounted for with $3-$4 purchases here and there. I will buy something with cash that I wouldn't normally buy because I know that "mentally" I won't hold myself accountable for it. I might not normally buy a can of soda from the machine but I'll never miss that $1 if I have the cash. Another nice thing about not having cash is that few soda machines will even take plastic. It used to be that no soda machines would but I have found some exceptions recently.

    When I used to smoke, I would only buy cigarettes with cash. Because I didn't like admitting to myself how much they cost and seeing it on my budget would make it real. It would be, "I really want some cigarettes… and I *have* cash!" If I didn't, I would not buy them.

    I have the same problem Investing Newbie mentions. I recently paid for the gas on a car trip with my card and was repaid in cash by the other people for their shares. I fully intended for the money to be deposited into my bank account. I've already blown through 25% of it without noticing. So I hid it from myself and put it with my checks that need to be deposited. It's horrible.

    Anyway, the plastic works for me and keeps me on track. The cash never did.

    • Just wanted to say congratulations on quitting smoking! It sounds like you kicked the habit which is quite impressive. Consider this a virtual pat on the back.

  10. Exactly. Cash calls to me and it's harder for me to pull things up and see what I've spent. Whereas it makes me shudder to know that the money's coming out of my account. I think the web generation may be a bit different on this compared to previous generation–we're used to keeping track of a lot of virtual stuff and the virtual is as real as the real.

  11. I, too, hate having cash on me. I definitely feel the need to spend it asap! If I do find myself with extra cash, I either deposit it or stash it in a tin at home. I stick to using my debit so i can track purchases easier and because sometimes I feel silly swiping my card for a $2 purchase, so I won't even bother. Definitely helps me to stick to credit-only.

  12. I don't ever carry cash with me. My husband is always trying to give me a $20 "just in case" something came up. But if there is cash in my wallet then it becomes wasted money. I am a Debit Card only. Credit cards are evil to me. They get me in trouble.

  13. You have a front right butt-cheek?

    I try to stick to cash because I only balance my checking account every couple of weeks and all those little purchases make things difficult.

  14. I agree with ya dude. I prefer using my card instead of using cash. Cash is dirty, I stand the chance of loosing it and if it's in my pocket, I spend it. If my card gets stolen, as long as I report it in time, it's all good. If my cash gets stolen, it's as good as gone.

    I pay my credit card bill in full each month AND my credit card pays 2% cashback on everything.

  15. Debit and credit card all the way. If I have cash I spend it. It's almost like cash is printed with invisible ink on invisible paper. What other explanation could there be? I mean, paper money is in my hand then…BAM! gone!

    Always use debit and credit cards. (and I always pay the balances off plus I get points)

  16. I love your post! A few years ago, a coworker of mine got me to read Dave Ramsey's Total Money Makeover. At that time, I considered going to an all cash system like he advocated. I decided against it because I get a 5% cash rebate for all gas, grocery, and pharmacy purchases on my credit card. I use somewhat of a 'modified' Dave Ramsey approach by using my credit card for those purchases for which I get a discount and cash for almost everything else. Sometimes I use a credit card for "other" stuff, but I always pay it off at the end of the month. Otherwise, I give myself around $60/week to spend on eating out or other fun stuff. This system has worked well for me over the past 2 years.

  17. It all spends like water so it's best for me not to go shopping at all unless I have a specific list of things to purchase. I just took inventory of my current financial position after reading a book by Anthony Manganiello called "The Debt-Free Millionaire". I was a "big picture" spender but I can now see it's in the little things that BIG savings can be attained in the long term.

  18. I use the envelope system for groceries, entertainment, dining out and blow money. My having to track each expenditure in the respective envelope I keep track and within budget. I wouldn't do so good with the credit or debit card because I "forget" previous expenditures and then am surprised when I get the bill or reconcile my account.

    I agree with SS4BC that each person/family has to figure out what works for them and use it.

  19. I tried the cash-only envelope system but that was an epic fail. I set aside dollars for each thing, but we would move money around the envelopes to suit our wants lol so now we just spend wisely. I like debit and credit just because we can see what we're spending on anyways. I think it was Fabulously Broke who said whenever she uses a CC she'll pay it off as soon as possible – like an hour later or something. That's what I've been doing as well, on top of the big debt repayment chunks. It's working 🙂

  20. I could do okay with cash if it was just myself that I had to worry about. But no one else in this house (neither the husband or the two children) seems to respect or understand the concept of envelopes. So cash tends to disappear out of my envelopes. I've gone back strictly to credit. And I don't wait until the bill comes to pay it. I'll pay the current charges every two or three days.

  21. Could not agree more. Every time I get hold of some cash, it tries to convince me to stop by Taco Bell for a feast. Echoing previous comments, the rewards for using credit cards are great. And I like having all of my spending on a single statement which I can track online.

  22. I admit I hate using cash, in fact i only carry credit cards. that helps since i can always tell myself i have no cash on me to resist impulsive shopping and eating out (chinese, cash only) . Plus cash just has that power of disappearing. I lose receipts all the time. Using a credit card not only lists your expenses but makes a categorized pie chart for you 🙂

  23. I could have written the same post. I don't even like using debit. My husband used debit for a large purchase last week and the store double-charged him (it was straightened up in the end but it took up the rest of the available balance in his checking while it was pending, leaving him only $29 – good thing nothing bounced!) For reasons like that and others, I prefer to use credit and settle up later.

  24. well I agree 102% with you. Dave Ramsey is an idiot and people who think there is something magic about only using cash need to educate themselves. Moreover, by using a credit card I get three things cash does not provide 1) the ability to track expenses easily 2) protection from nefarious businesses and 3) rewards. what happens if you lose cash? you're SOL. lose a credit card and you are protected. in short, CASH IS SUBPRIME

  25. There is nothing "magic" about using only cash any more than there is magic associated with card use (debit or credit).

    Following a job layoff and personal bankruptcy, we currently enjoy having only cash and checks to make our purchases.

    Fewer things infuriate me more than seeing the silly ads on TV where the credit card folks just whiz right through checkouts while the bumbling cash users are holding everyone else up. 99% of the time this situation is completely reversed, with a bunch of folks that have their cash ready in their hand to check out but everyone is waiting on the credit or debit card to process.

    Not to mention those who don't even know what product (credit or debit) they have and how to use it….

  26. Card-only is fantastic for suburb-dwellers who shop exclusively at franchises and care neither about local businesses (whose failures they expedited) nor product diversity. In the real world, cash is a useful way to not be a boring asshole.

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