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Old 02-14-2010, 12:09 PM   #41
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Originally Posted by Onward View Post
Wow. That's a lot of votes for all-cash as a way to cut spending. Are you all using currency or debit cards? If currency, how often do you have to hit the ATM?
I go to the ATM to take out $160 (pre-set) every 14-18 days, or about twice a month. Since I retired and don't have any expensive lunches out (or buy some cash-only transit fare cards), some months I make only 1 ATM withdrawal.

I have been using this system for more than 20 years although I did bump up the amount from $140 in the early 1990s.
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Old 02-14-2010, 02:32 PM   #42
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Even if you pay off your bill each month, study after study have proven that people spend more money when using a credit card instead of cash. Most studies show you spend 10-20% more using plastic.
It is surprisingly difficult to find the actual studies that say this. Usually you find an article which says what you say with little to no citation to actual studies. If there is a study cited it is usually one that you can't actually go and read. So I take the statement with a grain of salt.

However, I think it may be true in some situations. However, correlation is not causation. That is, most who repeat this mantra are arguing that this proves that using a credit card causes you to spend more than you would if you had to pay cash (or even write a check).

But another possibility is equally, or even more likely. That the size of the expenditure you are making determines your method of payment.

My husband doesn't like to use the credit card for smaller purchases. So if he goes to a store and is making a $5 purchase he will use cash. But if he goes to the store and has $50 of stuff in the cart he uses a credit card.

Also, until recently most fast food places didn't take credit cards. Even now many smaller (cheaper) restaurants won't take cards or put a minimum purchase requirement for the use of a card. So if I go to Chili's for lunch I charge it on the credit card but at the hole in the wall where they don't take credit cards under $10 then I pay in cash.
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Old 02-16-2010, 09:44 AM   #43
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A little update to our all Cash project. Using cash is very inconvenient! Everytime we went to get gas, I would give the cashier cash, fill up, then come back for change. That really sucked compared to using debit at the pump. Buying food was worse. Having to keep an exact tally of the food $$ amount while shopping was frustrating. It did make us pay attentention to food value and look at the $$/unit instead of the full price. BIG headache though. We did notice that our food budgeting leaves much to be desired. Cash usage definitely cuts going out to lunch at work! You relized quickly that $8 lunches a couple of times a week (x 2 people) really "ate" into the weekly food budget!

I now see why cash budgeting is recommended in 'Til Debt Do Us Part'. It is inconvenient, which slows you down from spending. There is a FINITE element to this method.

Will we continue? UMMMMMMMMM, not for gas.
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Old 02-16-2010, 11:47 AM   #44
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A little update to our all Cash project. Using cash is very inconvenient! Everytime we went to get gas, I would give the cashier cash, fill up, then come back for change. That really sucked compared to using debit at the pump. Buying food was worse. Having to keep an exact tally of the food $$ amount while shopping was frustrating. It did make us pay attentention to food value and look at the $$/unit instead of the full price. BIG headache though. We did notice that our food budgeting leaves much to be desired. Cash usage definitely cuts going out to lunch at work! You relized quickly that $8 lunches a couple of times a week (x 2 people) really "ate" into the weekly food budget!

I now see why cash budgeting is recommended in 'Til Debt Do Us Part'. It is inconvenient, which slows you down from spending. There is a FINITE element to this method.

Will we continue? UMMMMMMMMM, not for gas.

I am on the all cash system but do make two exceptions. The main one is using my debit card for all gasoline to avoid the hassle of going inside. The other is when I decide to buy something online.

I do use cash for groceries and it is here that I think is keeps my expense down the most. I only give myself $55 per week for food so I can only buy so much and then need to make it last. When I was using my debit card, I bought everything I wanted or looked good and found I wasted a good bit of it.

It also really helps out when I am in a bar or restaurant. If I only have $20 on me, I cash out at that point and go home. When I was using a debit/credit card I stayed until I was ready to leave.
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Old 02-16-2010, 12:13 PM   #45
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a bit tangential, but maybe related as far as people worrying about giving up card rewards: there is a program through the us mint for selling $1 coins that they are required to get into circulation that waives the shipping price, sells for face value, and bills to credit cards as a purchase rather than a cash advance. They have limited the number allowed per person due to people buying pallets and depositing them into the bank just to get mileage and rebates. If converting to cash for your spending is what you are planning, having to carry a roll or two of dollar coins (i think the rolls are $25 apiece) might be a good solution. The mint has some disclaimer about waiving the limit on request with a good reason - who knows, they might accept the budgeting in cash as good enough, since it fulfills the need to circulate the coins!
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Old 02-16-2010, 03:21 PM   #46
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My impression is that people who use a "cash budget" spend less because they have a zero-based budget and not simply because they use "cash."

I wonder if these survey's can be drilled down, somehow, to see how many within the "cash-envelope" camp or credit/debit card camp use a zero-based budget vs. a reverse budget.
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Old 02-16-2010, 05:39 PM   #47
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What if instead of putting money into envelopes you just assigned categories every month and wrote down the exact dollar amount ? Then every day you just subtracted the amount you spent whether debit , credit or cash . You would still be doing a tight budget just more conveniently.
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Old 02-16-2010, 07:17 PM   #48
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I don't think we would spend more or less no matter how we paid for stuff. Neither my husband or I are big shoppers and we both like saving money more than spending it. I pay for as much as I can with the cash back credit cards. It is like getting free money.
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Old 02-16-2010, 07:27 PM   #49
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What if instead of putting money into envelopes you just assigned categories every month and wrote down the exact dollar amount ? Then every day you just subtracted the amount you spent whether debit , credit or cash . You would still be doing a tight budget just more conveniently.
That's exactly what I do, so it doesn't matter whether the money comes from my credit card or cash out of my purse. It's been working fine for me.
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Old 02-17-2010, 09:37 AM   #50
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What if instead of putting money into envelopes you just assigned categories every month and wrote down the exact dollar amount ? Then every day you just subtracted the amount you spent whether debit , credit or cash . You would still be doing a tight budget just more conveniently.
That is what we were/are doing. 'Til Debt Do us part' inspired me challenge ourselves to see if we could actually stick to a 'strict budget' especially in the food catagory. Accounting for money and living below our means is not an issue, since we save 2/3 our income per month. The food budget however, we have a hard time controlling and predicting. Our grocery bill could vary anywhere from $80 to $160 per week. When we use a debit card, this $$ variation is no big deal, we flop the card down and the food is paid for. Now, if we had cash, and our limit was $100 for the week, that puts a boundry on it. What we are learning, is that we dont necessarily want to be on a strict budget in this catagory. The are few options, do without or be alot more creative than we currently are with our food preparation. I didnt like either of those options. Since we can afford the variation, we are going to yield to our habits and continue as we were.

Habits are very hard to change, and I'm glad we only have only one $$$ catagory out of control.
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Old 10-14-2010, 11:08 AM   #51
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I realize that there likely is some creative editing, and careful selection of the couples featured, by the show's producers. Yet I find it fascinating that so many of these people, who suddenly are informed there are massively in debt, have been seeking instant gratification over figuring out where their money goes. The house, the new cars, the plasma TVs, the restaurants, shopping. Instead, they stick their heads in the sand and ignore the numbers. I try to catch every episode I can.
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