Using Cash [It's the Only Way to Go]

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More and more people are giving up on credit cards. Sick and tired of the endless bills, late fees, interest rate hikes and annoying spending requirements, there is a growing movement of “cash only” consumers. Some are going a step further and getting rid of their bank accounts in addition to their credit cards. No interest is a small price to pay compared with the cost of high fees. Cash only living has the advantage of protecting cash from digital thieves, who are becoming much more sophisticated. Another advantage is eliminating the time it takes to manage a checkbook every month.

People who live on a cash-only basis do not have to wait for checks to clear or for credit card balances to be charged. Paying for everything in cash eliminates all of the time spent waiting for the financial system to move money from one account to another. Living a cash only life has many advantages, especially for recovering spendthrifts or compulsive buyers. Cash only offers several advantages to the newly or established frugal consumer. Aside from the loss of both convenience and hassle, cash only living can help people gain control over their financial lives. Here are four big advantages that convince many people to go cash only and bank-free.

Using cash makes budgeting easier

With a cash only budget, it is easy to keep track of every expense and how much money goes to that expense each month. Running a budget is much simpler when credit cards and bank accounts are eliminated. Every single expense can be tracked, and the various small expenses that can sneak up on even the most careful budgeter are eliminated. A budgeter on a cash only financial diet is often surprised by the savings that can result. Going cash only provides an incentive to minimize expenses, which can itself lead to a more fruitful experience.

Using cash reduces debt and stress

Living a life without any debt or even the prospect of debt is liberating. The legal apparatus associated with debt can be intimidating, such as debt collectors, bankruptcy courts, debt management agencies and credit counselors. Avoiding debt altogether by going cash only can be a great stress reliever. Paying for everything in cash gets the budgeter control of his money instead of having his money control him. Being at the mercy of credit card companies is a very unpleasant experience. Cash only eliminates the many pernicious forms of debt and makes financial affairs less of a burden.

Using cash can lead to happiness?

In this modern world of one thousand and one entertainments, it is easy to lose track of the important things in life. An extravagant spending lifestyle is often financed by debt, and getting rid of the debt and the credit can reveal how hollow this lifestyle is. A family that cuts back on spending has to improvise and find ways to spend more time together. This can improve the relationships between family members. By making the choice willingly, everyone approaches their common situation with a sense of being in it together.

Using cash promotes personal growth

Debt allows someone to live beyond his means. When this is embraced as a way of life, personal behavior tends to deteriorate. Getting rid of the debt, in addition to increasing personal and familial happiness, can result in self-improvement and personal growth. Debt is a tremendous temptation that can ruin inner self-respect and self-esteem. Society still remembers the days when debt was looked upon as practically sinful. Attitudes have moderated since then, but a remnant of the old stigma remains. Going cash only can have emotional, even moral benefits, if done appropriately and for the right reasons.



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1 Olivia

Using cash only to keep in line with your budget, makes a lot of sense in your situation. But once you put children, and extensive job related travel into the mix, other payment methods, (judicously used), in addition to cash, make more sense. The secrets are to keep track, carry no debt, and be accountable to a predetermined budget.

2 Jon | Free Money Wisdom

I agree with you Olivia. It’s definitely not a solution for every type of personal situation. I mean, even i use credit cards, but simply for the bonus cash back programs. However, the majority of Americans are not responsible enough to use credit cards. You’d see more households with their finances in order if they went on a strictly cash based budgeting system.

3 Heather

We use a mostly-cash budget, but I can’t imagine what a huge PITA it would be to have to pay bills without a bank account. And for auto-pay accounts, I prefer to pay them on the credit card and then just pay off the card (which I’ve done every month for many years now), as my paychecks don’t always line up nicely with auto-deductions.

4 Jon | Free Money Wisdom

Haha, yes a bank is critical! Imagine having all that cash laying around the house. I should have made it more clear, I mean cash=debit, so that’s allowed! Auto-deductions can be tricky, just gotta budget right and make sure you have enough left for expenses.

5 john

I agree. Cash is King. Pay yourself a cash salary each week for your day to day expenses and when that is gone, bad luck. Everything else can be done by direct debit. Throw you credit cards away.

6 Jon | Free Money Wisdom

Yah, debit cards are really useful too. No need for credits for most people. BUT, if you;re responsible, you can make nice side income with them!

7 Kristen

I liked your idea of using a cash only budget but like a few of the other comments stated sometimes it’s just not logical. Matt’s idea of cash envelopes too which is what I tend to use as far as my cash budget goes. I liked the article and you definitely inspired some new ways of thinking about things.

8 Jon | Free Money Wisdom

Glad I could inspire someone today! What’s cool about personal finance is that there is always a new way of going about things.

9 Mary

Question: we live in a small town and our bank is approximately 30 minutes away. It seems somewhat inconvenient to run the bank every week (when we get paid) just to withdraw the cash that we’ll need until next payday.

Also, how do you work it with married couples? Who carries the cash? What if you’re out and about running errands and you realize you didn’t bring enough cash from home? What if you ask your husband to pick up something on his way home from work but he can’t because he didn’t bring any cash? I’m just trying to think of scenarios where this would not for us.

Is it truly a good thing??

10 Heather

We keep our weekly cash at home, where we both have access to it.

If I’m running errands, I bring enough money to buy what I planned to buy. Th only times I haven’t had enough cash on me is when I have more in my basket than on my list. It cuts impulse buys very effectively.

If I ask my husband to pick up something and he has no cash, then either he doesn’t pick it up or he pays credit and we take the cash out of the weekly allotment.

We saved enough money to pay off his car two years early by doing this for five months. Truly a good thing.

11 Matt Jabs

1. Get your money direct deposit so you don’t have to go to the bank to deposit your checks every week.
2. Figure out which categories work best for cash. We use cash only for groceries, misc, dining out, entertainment, and clothing so we have 5 separate envelopes.
3. Figure out how much cash you need for a months worth of cash purchases and withdrawal that amount once/month when you go into town.
4. Either both carry half the cash so you each have some for all categories or divide it accordingly based on who does the most shopping.

We used to give Betsy most of the cash for everything except misc (we both took $100/month for misc) because she did most of the shopping. Now we’re together all the time so we just split it in half. Works incredibly well.

12 James

I use cash only because I refuse to live by the terms and conditions of banks. I refuse to waive any of my rights! Abitration and Mandatory dispute Resolutions be damned! I also happen to be debt free for the past 19 years and life is great!

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