One of the lessons I share is how it is important to use cash. In fact, I recommend using cash for nearly everything you buy. I have people argue with me all of the time “but when I have cash I spend more.” I do agree that not all ideas work for everyone, but here are reasons why it is best to use cash (and what to do to make it work).
You need to keep track every cent you spend. If you get cash and just use it as you please, without tracking it, it is very easy to go through it quickly. However, if you keep it in envelope and mark it for the item intended (example groceries), and then write down the amount you spend, you will be able to track how you are doing your spending. You also know how much you have left. This helps you think twice about that extra Latte or new pair of shoes you want to get. If the cash is gone – you can’t buy.
When you use cash for major purchases, you can negotiate prices. This is something that many do not realize. When stores price items, such as televisions, they have to mark them up to cover the credit fees they have to pay for accepting your credit card. If you are paying cash, they do not have that additional charge. My husband and I did this when we purchased our new television and stand for our family room a couple of years ago.
We saved the money and went to a local store. We found the items we wanted and I simply asked him what deal could they offer me if I paid them in cash. Not a check. Not a debit. But cold. hard. cash. He left and asked his manager and came back with a 5% discount. That may not sound like much, but on a $749 television that saved us $37.40. That was MY $37.40. Not only did we save, but when we got home and set up the new items, it felt different. We owned it. There wouldn’t be a bill coming in a month. We would not be rushing to pay it off before the interest free introductory period ended. We did it. We worked hard and saved and the reward was ours to enjoy.
I believe that it was partly more enjoyable as it was the very first item we bought after we had paid off our debt. We actually had a small 25″ tube television that we used for over 2 years when are larger one was damaged during a lightning storm. Sure, we could have rushed out and bought something right, but that would have come from our emergency fund. A television is a want – not a need. For us, it was not a true emergency. We had a TV that would work. There was no need to nearly empty our savings account just for a television. It was about priorities and a TV is not one (as far as were are both concerned).
One of these days (very soon) you will be able to shout WE’RE DEBT FREE!!!!!!!! Keep up the hard work!!
(I am not a financial advisor and the information listed within these posts is not to be construed a financial advice. Financial concerns/issues should be addressed with a professional in order to receive advice and assistance.)