Monday, November 03, 2008

On point, Stayin ahead of the Curve and History in the making...

It's been 21 months in the making and now it's come down to one day on the time clock to history in the making. If you haven't made a decision, then you only have 1440 minutes until the polling places swing open to cast your vote. I hope that most of you have done so by now and will take a few moments to check out our latest posting. As we prepare to turn the page in leadership, it's important that we continue to understand our personal responsibility in making our lives better. In the words of Super money guru, Suzie Orman,"'s people first, then money, then things..."

Turning Spenders into Savers: The benefits of Paying in Cash

by Andrea Cecile
From our online partner, Queercents, I found this interesting article which supports a concept that I'm slowly adopting. It's all about chainging your spending habits by using an "all cash" mindset. In a nut shell, if you don't have the cash to spend then perhaps maybe you should rethink that purchase. Read on and take this another teachable moment....

It features a lunch room cafeteria in full swing, with dozens of people ordering, cooking, walking and paying – all perfectly synchronized. While busy, cheery music plays in the background, the whole cafeteria is engaging in this well-coordinated routine; seen from above it looks like a Busby Berkeley number. All is well until the dreaded cash guy arrives. While everyone else swipes their Visa Check Card for payment, the cash guy has to pull out his wallet, count out bills, and accept change. The music slows, and the perfect routine implodes, with people bumping into one another, drinks spilling, etc. The tag line implies that using cash will just slow you down. In many ways, that is true and I actually think it is inadvertently a great endorsement for using cash. Little does Visa know!
Think about it: with a credit/debit card, you are much more blinded to the total cost of your purchase than with cash. Surely debit/credit cards are faster than cash, but in our current economic situation maybe what we need to adopt is a slower, more conscientious approach to spending? I know my personal transition from using credit/debit cards to cash helped guide me toward being a better saver. Sometimes, slower IS better. Here are 4 reasons why using cash is better for your wallet.
1. Pre-set limits to spending: Especially for smaller purchases, cash gives you a level of control that is difficult for spenders to instill themselves with a credit/debit card. For example, I used to use my debit card to pay for work-week lunches. Often I would find myself at the register with a $15 charge, and once, at Whole Foods (FYI: the Whole Foods cafeteria is amazing, but pay-per-pound, so also confusing and expensive!) my bowl of food rang up to $23! Since I was using my debit card to pay, a couple of extra dollars never made much of a difference. But now I cap myself at $10 per lunch, and only take that amount in cash with me. This caused me to be more aware of prices as I’m going along, and forces me to stick to my budget. Some people can do this without using cash, but using cash and leaving all other methods of payment at home gives a spender like me the willpower I don’t normally have.
2. Counting out bills makes it harder to spend them: It is a proven fact that counting out bills to spend always results in less spending. I’m not sure why this is, but I’m willing to guess that when we actually see how much money those new boots are costing us, we’re much more likely to re-consider our purchase. Using cash gives you a better sense of what you are spending and puts prices into real terms, giving us a much needed perspective on cost.
3. Saving the change: Some new-fangled check cards do this now, but there is really nothing more satisfying than carrying a years’ worth of change to the bank in exchange for enough cash to go out to dinner. Using cash for all your purchases allows you put aside this “extra” money without much sacrifice. Just by saving your coins for a couple of months, you can build up a nice rainy-day fund. If you save your coins for years, like my brother does, you can even go on vacation using only spare change! One of the easiest ways to go from being a spender to a saver is to start saving your change. And the best way to get more change is to start using cash!
4. Using cash allows you to take advantage of hidden discounts: Did you know that stores and restaurants have to pay a fee to the credit card companies every time they process a credit card transaction? This is why many smaller stores and restaurants are cash-only, or have minimums for credit-card purchases. By frequenting cash-only places you are taking advantage of lower prices across the board, because of lower operating costs. Similarly, you can also take advantage of cash “discounts” at places that have credit card minimums. How many times did I get suckered into buy something I didn’t need or want in order to make a credit card minimum? By using cash you can bypass the need to purchase something for no reason, and short-circuit your spender impulses.
Using cash for the majority of my purchases has certainly slowed me down a bit, but that’s what I wanted. I am no longer as impulsive or careless when I make purchases. Having to be deliberate and thoughtful because I was using cash made me more aware of my spending habits. It was a major step in turning this spender into a saver! Do you find using cash is better for you too? What are some tips you have about when to use/not use cash?

No comments: