Tuesday, May 31, 2011

Fixed Income Living-Is Cash Really King?

Traditionally, I am a gal who rarely uses cash. I have a tendency to lose it. I spend all the big bills and end up with change and ones everywhere. Unless it's something I know I may want to exchange, the receipt tends to get lost in never-never land, meaning when it comes time to settle up with Quicken, I'm out of sorts. Historically, I've avoided cash so much that I used to give both husband and children weekly allowances so that I wouldn't have to deal with the "Do you have a dollar or two" requests.

This doesnt mean that I use a credit card, my payment of choice has been the debit card from my bank (USAA). It allows me not to have to fumble around with change, and with easy, regular downloads to Quicken, it has been easy for me to see where money has gone (I'm one of those folks who generally shops at one store for one type of thing. I buy food at the grocery, and home repair items at home depot. Occasionally I have a shopping to trip to somewhere like Target that is a mish mash)

Currently, I'm more interested with how much is leaving rather than where it goes, frankly.  Experts regularly advise that people who use plastic spend more than those who use cash.  For this reason, I'm going to attempt to go with the flow and use cash for the summer for all non bill expenses. Obviously, there will be exceptions. I'll still pay at the pump rather than going inside, and there may be the occasional discount or Christmas deal or hotel reservation that has to be made online.  But for the most part, I will take an alloted amount out for the month, pay the bills, and let that be that.  Whether or not I will spend less, who knows. I like to think that I am pretty frugal no matter what the form of payment.

Life's an adventure, and I am always willing to experiment and explore on my way to cutting expenses and living well. June will be the first month of my new system. We'll see if those experts know whereof they speak, after all.

What about you?  Do you spend cash, pay with a card, or mix it up?


  1. I haven't had cash in my pocket now for weeks. I always had at least a $20 bill. Now, I just have some change.

    I use my debit card as a credit card. If I use my debit card as a debit card, my bank charges me $1, one buck, for every transaction. If I use my debit card as a credit card (still must have cash in the account to back up the purchase) I get 10 cents back. At the end of the month, I usually get $3 to $5 added back into my checking account. That's higher and better than some interest rates.

    Go figure.

    So, I use my debit as credit card for every little thing, regardless of how small (I've been known to charge $1.67 to the card at a hardware store). I always go into the gas station to pay for my gas. if I use the card at the pump, they hold $100 from anywhere from 24 hours to a week. I can't go that long without use of my own money.

    With the price of gas and food, I don't have any money left over for my pocket. Nor do I have loose change to cash in or bottles to return for their deposit money.

    I keep excellent rack of my money spent, however. Now, if I could just get more of it to go IN, rather than OUT, I'd be golden.

  2. I most often use a credit card to get the points which I then redeem for money off the credit card bill. That averages $200 every 6 months or so.

    Since I only use no-fee cards and pay the full balance every month it is as if the credit card company is paying me $400 a year to use their card.

  3. Morrison, I used to keep a twenty in my car and then just use my debit card as a credit card (no fee per transaction, and I get rewards). Fortunately USAA refunds atm fees as well. This will surely be a new thing for me. It may end up being that the cash makes no difference at all.........life is an adventure

  4. Bob, as I mentioned to morrison, that is what I have been doing, only with a debit card (used with a signature) which earns me rewards. As I say, it may well be that the amounts spent will mot vary at all, we shall see. My otehr alternative would be to open a "spending account" at a bank and leave my bills at the far away bank in san antonio...

  5. I only use cash on trips or I come out way behind. I am one of those very few who still uses ....travelers checks!

  6. I use my debit card 99% of the time. I am fortunate in that my bank doesn't charge any fees and I earn reward points (to be used toward gift cards) as well. It's a win/win for me. I generally carry about $20 in small bills on me. Plus I usally have a buck or two in change.


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