Cookies on the Cash-is-Cool web site
By continuing to browse our website we will assume that you are happy with this.
Cash is under threat across our planet.
Card schemes hate cash, as they can only wring profit from their debt-creating plastic products.
Visa and MasterCard have both made clear that cash is their enemy. Since 90% of all purchases on our planet are made using cash, this enemy of the card schemes must be the trusty friend of humanity.
Cash-is-Cool is working tirelessly to defend cash from predatory card schemes.
Using cash is an easy and nearly foolproof way to take control of your money and set a budget. Like most people, you probably pay most of your major bills (mortgage or rent, gas and electric, etc.) by direct debit. But you pay for your day-to-day expenses using your debit card or a credit card. Frequently—more often than you may want to admit—you may find yourself going over your limit or into your overdraft. In the back of your mind you hear that little voice asking how is it that you always end up in the same financial position every two weeks or every month.
A cash diet will quickly help you understand where you are going off the rails and put you back in control. First, take all of those cards out of your wallet (except one for emergencies) and switch to paying for your daily expenses with cash. Go to the ATM machine and take out the money you need to cover all of your anticipated expenses. (You must know what these are. If not, make a list of all expenses with the accompanying amounts.) You should withdraw the same amount of money each time. The frequency depends on your self-discipline. If having cash really burns a hole in your pocket, divide the amount into what you will need every day, place each day’s amount in a separate envelope, and then carry in your wallet only the amount you’re permitted to spend that day.
There’s an interesting psychological phenomenon that kicks in when most people start to spend real cash: they become increasingly worried, even anxious, as the number of notes becomes fewer and fewer. This is tangible physical evidence that your spending is causing to you to have less and less money. It’s not like a debit card or store card where you can delude yourself because, like many people, you don’t keep track to the balance in your account. Using cash puts the stark cause and effect right in front of your eyes and in hands.
With your financial eyes and emotions aware of the truth you may have avoided before, your next challenge involves working on two fronts at the same time. First, figure out where you have been or wasting your money through thoughtless or impulsive spending. This tells you where you need to reduce your expenditures to stay within your budget. And second, you must figure out how to make the money you have go further for you, by taking advantage of special offers and sales. I’ll save these cash lessons for next month’s column.
This column’s bottom line truth is that you can gain the common sense knowledge you need about money from handling cash—real money. The basic arithmetic of subtraction and addition occurs right in your wallet. And once you see the truth, you can hopefully translate what you’ve learned and the insights you've gained into practical steps toward an improved financial life.
Thursday, 25th August 2011