Tuesday, July 6

i'm putting the plastic down...for now.

Whew. That holiday weekend came and went so quickly. How was it? SSBF and I aren't big on the fireworks aspect of the 4th of July so that kind of takes most of the excitement out of the holiday for us. Plus he had some planning to do and I had to write an always exciting managerial accounting paper. All and all though we had an enjoyable Saturday :)

Now, for those of you that read so many blogs you can't keep them straight sometimes (me) about two weeks ago I mapped out a plan to pay off my credit card debt in less then a year, but realized my current spending has been a little (totally) out of control. After examining and estimating what my next credit card bill will be ( wayy too much!) I've decided I need to do something to rein in my spending once again. If you remember back in April I challenged myself to give up shopping for a month (and succeeded). I also have been keeping a diary of my spending for awhile now. However, neither of these approaches have done anything to currtail my spending. Once April was over I quickly and all too easily slipped back into my normal pattern. As for my spending diary, it has done little more but remind me of where I spent all of my money.

Starting July 11th, the beginning of my new credit card cyle, I'm going to try something I've been reluctant to do in the past. I am ditching my credit cards for one full month and going to an all cash method. A lot of psychological research supports that people are less willing to spend money when it involves handing over actual cash. With a credit card the consequence of your actions (less money) isn't visible because you are merely swiping a piece of plastic. It's called a psychologial barrier. The purpose is to make you stop and evaluate what you are about to spend money on. I always thought this was interesting but not something I would have to resort to. Guess I thought wrong.

I've never been a big fan of carrying cash because I always feel like I am going to lose it but nonetheless at this point I am willing to try anything. My plan is to take out a sum of money, I'm thinking about $250, that has to last me the entire month. While most personal finance experts recommend not putting anything on your credit card I am making the exception for the comcast and verizon bills (the balance is automatically charged to my card each month thus making it too annoying to change.) and gas. The reason I am making the exception for gas is because I am too lazy to walk myself from the car to the cashier, and it is kind of a fixed expense. Mostly the former though.

One very obvious benefit of making the switch to cash is that it will basically eliminate any online shopping. If I want something I'm going to have to drag myself to the brick and mortar store to get it, a great barrier to spending considering how much I loathe the malls around these parts. One negative is I will miss out on my 1% match on spending that goes directly towards paying my Sallie Mae student loans but I think I can live if I don't get my $6.00 this month.  

What do you guys think? Will the all cash method reduce my spending or increase my time spent at the mall? Do any of you prefer cash to credit?


  1. I did the whole "envelope" system before vacation (where you set aside cash for every spending "category" and put it into it's own special envelope) and it helped me save SO MUCH money! But then when I went on vacation I got out of my habits and now I magically have $1,000 on my credit card. Haha. So back to cash I'm going. :) I find it really does help. Me at least!

  2. When I was paying off my credit card, I would say that going cash-only was the #1 strategy that helped me get that debt gone. Do it!

    (Now I use my credit card for most purchases...but I pay it off every month!)

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  4. One thing to be careful about, be sure not to carry around too much cash at once! I find that when my wallet is full, I feel like "oh I have plenty of money! I can totally buy this dress!" So when I go to the mall, I only bring however much I'm letting myself spend at that time, so I have to be more careful about what I purchase.

    Good luck! :)

  5. I've been doing this on/off for a bit, it works, truly, because I'm a lot more reluctant to hand over that bill, go for it!


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