Are You a Cash or Credit Person?
Posted by Cap in Personal Finance on March 5, 2008 |
I am not a cash person.
If I have cash in my wallet, they disappear within days.
Which is awfully strange because having no life, I hardly step out of my dungeon… so perhaps my family steals from me (kidding).
It seems there are two types of people in this situation. Those that spend easily when they use cash, and those that spend easily when they use credit. I am the unfortunate former.
You would think that having cold hard cash will deter the unplanned Cap n’ Crunch buying, but alas… I am but a weak man. For whatever reason, cash-on-hand feels like spare change for me (I suppose it would be different if I carry hundred dollar bills).
On the other hand, having my credit cards with ludicrous credit limit in my wallet does not make me spend recklessly. I have friends that swipe away without a second thought — only to do the usual moaning and groaning at the end of the month — but when it comes to cash, they spend much more carefully.
My cash and credit mentality is most likely due to the fact that I got into debt via credit. Hopefully one day I can kick the habit and spend with much more discretion, regardless if the instrument is cash or whatever else.
Having said that, I suppose there’s really three types of people, the last one being those that can spend carefully regardless if it’s cash or credit.
I hate you people.
Tips on Spending Wisely with Credit Cards:
- Carry only one card unless you are a master rewards card juggler.
- Apply for online access and make a habit of checking balances regularly. This way you can see the full effect of your spending clearly.
- If you have issues with spending, make yourself a credit card slip cover that can act as a reminder. Write the questions below for added emphasis.
- Ask yourself these questions before using your credit card:
- Do I really need this?
- Can I afford this at the end of the month?
- Will I be glad I bought this a year from now?
Tips on Spending Wisely with Cash:
- Carry a bill amount that’s harder to break, such as $50. A helpful barrier to prevent you from spending on little things.
- Set and carry only fixed dollar amount weekly and deposit any weekly excess in jar. When you need more, withdrawal only from cash jar. Deposit cash jar back into banking account after few months. Rinse and repeat.
Tips on cash above are comment suggestions in an old post from readers, Jack and Independent George (thanks guys).
16 Responses to “Are You a Cash or Credit Person?”
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March 5th, 2008 at 6:33 pm
I think it depends on what I’m used to carrying. Now it’s almost always credit so cash is easier to drop through my fingers. When I was younger I could squeeze a dollar like no one else.
March 6th, 2008 at 4:29 am
I am the third type. Carry both. Credit card for business, cash for personal. Hate monthly bills so am slow to put items on credit card. Hate not having any cash in my pocket so am slow to spend it.
March 6th, 2008 at 8:21 am
Barb: Yeah I definitely get your point. It’s most likely whatever we associate with being actual “money.” I’m so used to carrying credit that all I see are numbers through various accounts instead of actual cash. Looks like Lonny is the type that can balance it like a normal person!
March 6th, 2008 at 12:05 pm
I like the cash idea w/ the jar. Definitely going to try it out next week!
March 6th, 2008 at 12:37 pm
My wife and I have a set amount of cash each week. However, I do carry one card for emergencies and use it sparingly. I have suggested the jar idea to my wife, but she’s not got the will power to not tap into it.
March 6th, 2008 at 6:32 pm
cash/debit card- if you don’t have the money, don’t spend it. If you have an emergency, use your emergency fund of cash. Credit cards make it very easy for one to become a slave to the lenders. I work to feed my pie hole, not the pie holes of the lenders.
March 7th, 2008 at 10:42 am
Hey, whatever works for people, I always say.
I used to do mostly debit with some cash for small purchases (like under $10. Charging an ice tea just seems so….excessive). But I overspent regularly and was short cash days before payday regularly. Plus some places hold a debit for a few days and I was so close to the mark that I would have overdrafts b/c I would forget I was waiting 7 days for the gas station to put the debit thru. Arrgh.
That way didnt work for me. I now do the old fashion cash-in-envelopes (for the last three mns anyway). I dont overspend if I do that. My way didnt work, so I went to my parents way. Darn it when they are right about something! :)
Fees weird though leaving the bank with $500 in cash every payday.
March 9th, 2008 at 11:44 am
Honestly, it both scares and comforts me how much I relate to you.
I’m still figuring out how not to burn through every penny I have. I love the suggestion to ask yourself, “Do I really need this?”
So thank you!
March 9th, 2008 at 1:43 pm
I love to use credit cards to take advantage of the reward programs. But when I tell someone that, they frown upon it. They wonder “what if you can’t pay off the bill?”, etc.
What most people don’t have when it comes to credit card spending is self-discipline. They love to treat the plastic like it’s monopoly money. I think if people are responsible with their credit, you really can take adavantage of the credit card situation.
March 9th, 2008 at 7:50 pm
I am cash nearly cmpletely. I hate using a card.
March 10th, 2008 at 8:48 pm
Great ideas, particular the jar. and great blog
March 17th, 2008 at 12:29 pm
I do it like this. I have 2 different wallets, one for when I go shopping, and another for the rest of my money. Whenever I go shopping, I fill that wallet with as much money as I think I’ll need, in cash (rounded up to the next $20 increment). That way, I have my ID, my money, some spare change, and no way of going over-budget.
March 18th, 2008 at 12:07 pm
Amen. Just… amen.
March 18th, 2008 at 3:27 pm
I carry several cards and cash. I pay for almost everything on a card and pay off balances in full each month. I have a Citi rewards card and use it to buy plane tickets and when I have enough points for the next flight saved up I switch to my Amazon.com card and collect gift certificates that I use on things I can get cheapest through Amazon or I use them for gifts.
I take out $100-200 at a time, at any ATM and don’t pay fees- that is one of the features I require from my bank. That lasts a while as I don’t spend cash just because I have it. I just don’t buy much, but when I do, I have a very specific system in place for how I pay.
I pay cash when I don’t trust the specific vendor to protect my card info or they don’t take credit.
Wylie
http://wyliemoney.blogspot.com/
March 22nd, 2008 at 6:04 pm
Wait, we’re NOT supposed to spend money we dont have???
April 14th, 2008 at 9:07 am
I am the in-between: I’m a debit card person. I’ll occasionally use my credit card for a big purchase to rack up rewards or at the end of a month when I need a part of my next paycheck to cover something (which is rare). I also never carry cash. But I constantly use my debit card, often many times a day. It is essentially cash, in that I am spending my own money, not putting things on credit, but I don’t have to worry about having physical cash on hand or breaking large bills. I just recently found out that my bank (Bank of America) has a check card co-branded with US Airways, where you can actually earn miles from debit card use, much like a credit cards reward program. I just signed up for it even though there is a $30 annual fee, because as much as I use my debit card, I know it will be worth it.