Blog - Going Green: How to Live a (Nearly) Cash-Only Life

Going Green: How to Live a (Nearly) Cash-Only Life

January 10, 2012

The theory here is if you pay with cash you spend less because you can''t go in debt when you don''t have any money to spend. My wife and I have adopted the ''When You Do Use Credit, Make it Work Like Cash'' philosophy. I would personally only recommend using credit cards if you have a tight grasp on your budget. Programs like Mvelopes.com, Mint.com, and Gazelle Budgeting Software make it extremely easy to stay on top of your finances. Today''s featured article comes from wisebread.com and offers some practical tips on how to live a (nearly) cash-only life. Read more below:

1. Carry Cash

Surprise! The first step in going cash-only is to actually get your hands on some of the stuff. It’s still green(ish), and it still works like a charm. Take a look at your credit card statements for an average week and see where/how you’re spending your money. Take a similar amount out in cash at the beginning of each week, and dispense it to yourself on a daily basis. Consider experimenting with the amounts a little and see if you end up spending less when you’re spending paper vs. plastic.

2. Save Receipts

One of the convenient things about using credit is the electronic trail it leaves behind. You can easily track transactions and refresh your memory about expenditures you’ve forgotten. But cash is a different animal. Get used to saving your paper receipts. I dump all my cash receipts in file folders divided by month/year. A shoebox and a binder clip for each month works just as well. It’s not the sexiest way to stay on top of what you’re spending, but it works like a charm.

3. Hold With Credit, Pay With Cash

Going cash-only doesn’t have to mean you spurn all of life’s conveniences or that you can’t leverage the power of credit from time-to-time. Using your card to reserve a hotel room, rental car, or other service is quick and convenient. Just remember, when you arrive at the hotel or car rental agency, pay in cash — and get that receipt.

4. When You Do Use Credit, Make It Work Like Cash

We live in the modern world and there are times (unfortunately) when cash just won’t work. For online shopping or other cash-adverse transactions, think of your credit card as a friend who’s spotting you a few bucks for the very short-term. Pay him back quickly. Who says you need to wait until you get your monthly bill to make a credit card payment? There’s nothing credit card companies hate more than getting paid back in full each month. I say, embrace the hatred and wear it like a crown.

5. Don’t Trade Credit Card Interest for ATM Fees

Whether you’re paying interest on a credit card or getting pinged by debit card withdrawal fees, using plastic usually means more money out of your pocket. Don’t trade longer-term interest for shorter-term ATM fees. Withdraw cash at the beginning of each week from your bank or an affiliated ATM and let that amount of cash guide your purchasing decisions — without the need for frequent, spur-of-the-moment trips to the ATM.

READ THE FULL ARTICLE

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