I'm a loyal cash user and, therefore, a loyal cash payer. I suspect that this can get annoying to people in these easy days of Venmo and Paypal, but for the past two years, cash has been my love language. One time, a friend of mine watched my pets when I went out of town and after she received her thanks-for-making-sure-my-animals-don't-die funds she sent me a text that said "Okay, I kind of love paying with cash!" To which I IMMEDIATELY replied, "CASH IS KING!"
But really...cash IS king. Or as Dave really says, "debt is dumb and cash is king."
Anywho, unless you've gone through your own financial peace journey, there is a solid chance you're probably not a frequent cash user. You're probably thinking that when you do actually have cash, it sprouts wings and flies out of your wallet. It legitimately burns a hole in your pocket until you spend it as quickly as possible.
I hear you and I see you, because I used to think the same things. However, after a few weeks of working off of a cash-only spending tactic, it became easier to manage and actually helped me stay on budget.
SIDE NOTE: this means I pay for groceries, gas, eating out, and shopping with cash. The exceptions are paying bills and anything that has to be done online, i.e. buying tickets to an event. I plan each month's budget out at the end of the previous month, taking into account everything that is coming up for the next 30 days. <-- This too takes practice.
Anyway, here are 3 reasons why CASH IS KING:
1. It Keeps You Organized - First things first - if you're going to dive into using cash for all the things (read: groceries, gas, spending, shopping), you've got to equip yourself with an envelope system. It can either look like this one or you can create your own using regular ol' envelopes. Either way, it's crucial to keep your bills organized. I started with the envelope system like the one linked above, and eventually removed the actual envelope inserts and stuck them in my normal wallet. To this day, I have the same envelope inserts I had when I started Financial Peace University two years ago. They are as ratty and ripped as you're picturing them.
Divvying your cash out into different labeled envelopes ensures that each of your spending categories are TRULY getting the money you've allotted. How often do we "put together a budget," only to not actually abide by it because we accidentally spent 15 dollars more on groceries than we meant to? But then you don't take into account that the extra $15 had to come from somewhere and you go ahead and still spend $50 on restaurants for the month. It becomes a gross cycle and the next thing you know you're down to virtually nothing in your account. Using a cash envelope system helps keep your spending organized so that you're giving each category its fair share of love.
2. It Keeps You On Track - I can't tell you how many times I swiped my debit card, simply SURE that I knew exactly how much money I had in my account, only to withdraw. One of the most interesting things I learned in my FPU classes was that when you pay with cash, that physical action triggers the same sensor in your brain that is triggered when you're in pain. When you swipe your card, no sensors are triggered. Swiping a debit card or credit card brings you no pain...until you look at your account later. Paying with cash makes you hyper aware of how much money you're spending and how much money you have left because you can physically see disappear as you're spending it. And there's nothing like a little pain to help you stay on track.
3. It Keeps You From Overspending and Overdrawing - Paying with cash is also a great way to ensure you won't overdraw your account. I used to overdraw ALL THE TIME, because I was not paying attention to how much I was spending. Looking back, I was actually avoiding looking at my account most of the time, terrified of the number I would see. Now - I pay all of my bills online at the beginning of my pay period, and then pull out the cash I'll need until the next one. I rarely even touch my debit card anymore, which means I'm not over-swiping or overdrawing. And sure - paying for gas with cash can be really annoying. But what is more frustrating? Getting out of your car to go inside the gas station, or having to pay another overdraft fee?
Switching over to a cash-only spending tactic takes some time and practice. I'm always reminded of how much I love paying with cash during the season of Christmas shopping. Since I do a lot of shopping online (2018 amirite? I see you Amazon Prime), I typically keep my Christmas money in my account. Saying it's a personal nightmare would be dramatic (AND I'M NEVER DRAMATIC), but it's always a little hard to keep up. Constant questions happen. Did I go over my budget for this person? Do I still actually have money in my account? It makes my envelope-using-head spin a little. In an ideal, non-online-shopping world (but who am I kidding, I love online shopping), I would have an envelope for each person and the allotted amount of cash that I budgeted ready to go.
So if you've been trying to live on a budget and things just aren't going as planned, consider using cash. CASH IS KING and will keep you organized, on track, in control, and on budget.