I feel like all the time I hear news featurettes or read articles about how it’s a good idea to use cash instead of credit cards. This will help you save money and/or get out of debt the experts say. When you spend cash, you will really feel like you are spending money and will do it more wisely. If you use your credit card, it will be like magic money that you don’t have to pay for and you will overspend. Also if you are really awesome you will have your monthly cash split up into different envelopes entitled things like “groceries” “entertainment” “clothing” etc. and once your money is gone from your envelope, tough noogies.
While I think this is a great theory, I seem to behave the opposite of it. Maybe if I could get money into the envelopes it would be ok. But because I cannot make myself do that, it is an awful idea. On the rare occasions when I do have cash, it feels like “free” money. There is no accounting for it. There is no magical paper that comes in the mail/online telling me how badly I have behaved.
For example, pretend I blew $20 on donuts one month. (That’s like 40 donuts people!) If my credit card bill came and said that, I would swear off donuts for the next 6 months as a punishment. If I paid cash for those donut? Chances are 100% that if I continually had cash the donut habit could continue. While it is true that if I didn’t have a credit card with me and only cash that would limit what I could buy, but I also wouldn’t want to be roaming around with a month’s worth of cash because I would probably lose it instead of spend it. I’m just talented like that. Also cash machines are like free money dispensers, they don’t report to you what you spent your money on, just that you removed it from your money holding location. So if you ran out of cash in this continual cash supply scenario, you could “just go get some more”. Magic, right?
All this random writing (that you are skipping through and not reading) has just now made me decide that next month I will be running an experiment. I will be doing the cash in envelopes to see if that helps me to save money versus using my credit card. It will likely be awful and I will hate it, but then you can laugh at me and that will be good too.
Man I lead an exciting life!!