Monday, June 01, 2009

Paying With Cash

As I mentioned in May, for the month of June our household will be doing its spending on (mostly) a cash-only basis.

There are a couple of reasons for this. Firstly, I want to see if our spending on variable expenses (groceries, dining, household items, etc.) really does decrease. And if this spending does decrease — I can't imagine that it won't, by the way — then I want to see how much of a difference it makes.

Here's a sampling of the items I'll be comparing against. The following are monthly averages from the latest three-month period (March, April, and May 2009):

Some items I'll be watching...

Second, with the upcoming "Credit Card Bill of Rights" changes being made in the financial industry, it will not surprise me to see Citibank, Chase, et. al. initiate a raft of annual and miscellaneous fees on those of us who use our cards for convenience and cash rewards only, and who never carry a revolving balance.

If these fees do appear, then Lisa and I will give serious thought to living on a cash and/or debit-card basis. I figure June will be a nice "practice run" for this scenario.

Cash Spending: The Exceptions

After some consideration, I've determined that there will be a few exceptions to our cash-only rule:

Online Shopping
No, I'm not going to send paper checks to Amazon for my book purchases. I tend to buy a book or three each month. In June, any book purchases will be made with either debit or credit card. (I really hate the idea of using debit cards online, but I'll make an exception for Amazon.)

Though gas-station owners might be ecstatic to see us paying with cash (or so I've heard), they'll not be the beneficiaries of our cash-centric spending in June. It'll be debit/credit cards here as well. Why? Because whether we spend cash or credit for gas, the amount spent will not change: We always pay at the pump; we always fill up; we never make convenience purchases at the counter.

Thus "cash vs. plastic" makes no real difference to us.

Auto-Billed Items
We have several monthly items which are auto-billed to one or more of our credit cards. Six-month auto-insurance premiums (happen to be due in June) are one; online-game and learning programs for our daughter are another. I'm not changing the payment plans for these services.

Business Expenses
Still using credit cards here. (Pretty much because these are all auto-billed expenses — hosting, domains, and such.)

One Reason to Hate Cash

I've already rediscovered one reason I'd much rather use cards than cash:

Loose freakin' change.

I hate it. I mean, I'd forgotten how much I dislike walking around with change in my pockets. Don't ask me why this is; it's just something that (1) as a kid, I was cool with, but (2) an adult, bugs the crap out of me. (And you know those dimes and quarters are gonna end up clanging around in the washer and dryer, right?)

In any case, here goes "cash only" at the IYM homestead!

Labels: , , ,

— Posted by Michael @ 8:14 AM


You'll probably learn a lot about your spending by doing this. Be sure to keep us posted.

Anonymous Anonymous
, at 12:48 PM, June 01, 2009  

I've been wanting to try this for a while. But every time we get up the nerve to go ALL CASH I think about having to carry that moeny.
Don't really want to mess with that.

But one day.......

Anonymous Tony W.
, at 5:39 PM, June 01, 2009  

You mentioned not liking to use your debit card online. Wells Fargo customer service suggested that I open a checking account specifically for online purchases. Then I use that dedicated debit card for only those purchases. I can move money from my main account to the online spending account. This keeps my "regular" money safe. You might consider this.....

Anonymous Anonymous
, at 6:16 PM, June 01, 2009  

This post has been removed by the author.


I've used debit cards online for years without much hassle. The rare exception (usually a computer software company annually renewing without notification or permission) my bank (both small town and national franchises) have always reversed the fees and taking care of the problems. I believe most, if not all, banks will honor a lost/stolen debit card the same way a lost/stolen credit card is handled. And assuming, since you track your money so well, that you're checking your online banking accounts daily so you'll likely catch any suspicious activity the same day as a transaction posts.

Also, use that extra change to your advantage! DON'T SPEND IT! Take all the change from the end of the day and save it like we used to do as kids! We pay for Christmas presents at the end of the year with the change we've collected throughout the year... the next time the cashier asks you if you've got a nickel tell them no and add that $0.95 to a "slush" fund.


Amazon does have a feature that will let you pay with your bank account actually. Also, a lot of online transactions can go through paypal now. I'd NEVER use my debit card online.

Anonymous Anonymous
, at 1:29 PM, October 08, 2009  
** Comments Closed on this Post **

Thoughts on my personal finances, goals, experiences, motivations, and accomplishments (or lack thereof).

My financial life began turning around when I took responsibility for it.
— Dave Ramsey


Start (2005-12): ~$21,900
Currently: $0
[About Our Debt Paydown]


Savings Goal: $15,000
Currently: ~$15,115
[About Our Liquid Savings Goal]