Is It Easier To Spend Cash Than Credit?
Posted by Cap in Personal Finance |
You know how they say you should use cash instead of credit cards? Because it’s easier to swipe the card than handing over real hard cash? For some reason, that’s not the case for me. At least, not in small dollar amounts anyway.
I have a real trouble with spending cash unnecessarily when I have it on me, especially on small purchases, which obviously adds up. Anyone else with the small cash spending bad habit?
Take the case from the other post below, where I buy something for my friend with my credit card, and the friend pays me back in cash. Let’s say he gives me a $20 bill. For one reason or another, if that $20 is on me… it would disappear within a week on unnecessary things.
This is the reason why I don’t carry cash unless I know I’ll need it. I’ll end up spending it on stupid things like fast food, snacks at the vending machine, baked goods, and cereals. If I don’t have cash and I come across a place that accept cash only, I’ll have to go find an ATM (a fee-free one at that), and by than the inconvenience will usually deter me from buying whatever crap it is that I wanted.
It’s especially true for local yummy food joints, where the mom and pop operation accepts cash only. I’ll be driving home from school, stomach rumbilng. Although there’s food at home, if I have cash on me I’ll tell myself: “Hey why not, let’s get some carne asada at Alertos, it’s only three bones.”
Doh.
8 Comments to “Is It Easier To Spend Cash Than Credit?”
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May 12th, 2006 at 7:25 am
I’m with you – I’m much more loathe to swipe my card (debit or credit) than I am to spend cash I have in the pocket.
My theory is, that it’s because I’ve just used cards for so long, I now mentally associate them with my money, as most people might still associate cash with money – thus the general truism of the statement.
As with any rule, though… ;-)
May 12th, 2006 at 8:47 am
Describes me to a tee – cash somehow disappears from my wallet for all sorts of little things (’hmmm, a cookie would be good with this soda I don’t need…’).
But if I need to whip out the ol’ debit card (I don’t use my credit cards at all anymore), I actually think about it first. More often than not, I just don’t buy little-thing-x.
May 12th, 2006 at 9:17 am
I’m the same way, but for a different reason. I’m obsessive-compulsive about checking my credit card statements online, so I always know exactly how much money I really have. Cash, though, feels like something separate from the electrons running through my computer screen, so I always feel like it’s a surplus on top of my account balances, rather than something that was taken from them.
I’ve solved this by withdrawing a fixed amount ($60) of cash each week when I go grocery shopping. Any weekly excess is added to the ‘emergency wad’ of small bills; if i need more, I withdraw from the wad. Every few months, I deposit any excess wad into the bank. The key is that I never have more than 60 bucks in cash on me at a given time, and I can’t spend cash I’m not carrying.
Even though this is really just a roundabout way of setting a cash budget, I find it a psychologically useful way of tricking myself into thinking I’m poor and can’t afford to spend anything.
May 13th, 2006 at 8:19 am
I don’t really keep cash on me. I don’t have a, have it spend it problem but I just don’t see the point.
Right now I have .77 cents in my “cash” account. If I buy something I use my credit card.
To me it’s like checks. Who writes those anymore? To stores anyway.
Dave
May 14th, 2006 at 4:55 am
It’s a quandary. Whenever I buy something at retail, I always make sure I have another way of paying besides credit card. The reliability of the computer systems behind credit cards is not 100%. Invariably, they’ll be having “network” problems after I’ve spent an hr or so picking out the pieces for my latest project from the home despot. Everything, grinds to a halt – NO one knows how to do a manual debit (remember the little swipe machines with carbon paper?) So I always have cash or a folded check as back-up.
BUT, now the family unit knows I have CASH. So it drips and drabs away within mere moments. And, alas, I am guilty too of buying cashew brittle from the amish store with the greenbacks.
Plus, I’ve found that change made is another loss. Buy something for $1.84 and you can bet that $0.16 will dissapper into cubbies in the car, change drawers or into the drum seal in the dryer. In this example, I’ve just spent 8% over retail for whatever it was I just had to have.
I’ve stopped carrying my folded check because of check kite fraud concerns. All the crooks need now is the routing numbers to debit your account (scary, eh?).
So…. I use my Dad’s trick. My cash is a $50 bill (his was a $20 back in the days). Now it’s Real Tough to break that, and it’s much easier to fend off the familial hordes with “Break my $50 so you can have a dollar?” tactics. Stops me in my tracks too.
May 15th, 2006 at 3:36 pm
ah good tips George and Jack, I’ll try either. It’s pretty easy to break a $20 now so I’ll try the $50 bill from the bank.
It’s as dforester said, I mentally associate my cards w/ my accounts now, so they’re more real money to me than these bills.
Funny how money has really just become bunch of numbers to me. I hardly see hard cash anymore, and it’s just a bunch of numbers ACHing from one account to another these days.
May 16th, 2006 at 5:49 pm
I find myself a cash person by only if I have small bills. If I have only $20’s or dread a $50 and my debit/credit card lying in wait then I am more apt to use the card. I know if I have a lot of smaller bills the candy and other delicious treats will start to call my name while I am still driving.
May 19th, 2006 at 11:38 pm
Alberto’s do you live in LA county too? Now you’ve made me hungry – I want carne asada fries too.