Cash is King

Dave Ramsey's tagline is "Cash is King, Debt is Dumb." Yeah, he has made a lot of money off of his programs but after really learning this concept and making it true in my life, I have SAVED lots of money. Cash is very visual and very tangible and it helps you to physically see what you are spending. I started budgeting money and put a number (say $50) for groceries for two weeks. I then took that money out of the bank in cash and put it in an envelope marked "Grocery." When I go to the grocery store, I take my envelope with me. Sometimes, I have to put items back or decide to only get one instead of two (but it's such a great deal!). It is not a great deal if you can't pay for it. This was very difficult at first but also so freeing!

Then there is that little snare called the debit card. It is like cash because it comes out of your account but it is visually like a credit card. So, should you use a debit card like cash? My answer is NO. Here is why:
-It does not have the visual impact of cash. If you want to budget $50 for groceries but see something you really like, you can still overspend.
-Did you know that you spend 10-18% MORE with a card (debit or credit) than cash? Don't you think there is a reason that banks have so many incentives to use your debit or credit card? Reward points galore! If we do the math, their reward is like 1% of what you spend and you are spending at least 10% more than you normally would. Who is really making out big here? IT'S NOT YOU!!! Don't be fooled by these "rewards." You would be way better off just using cash and putting 10% of what you spent in a savings account. I bet after a few months your "rewards" would be about 10 times what the bank would have given you and you wouldn't be forced to use it at a certain establishment (i.e. giftcard). You could spend it however you wanted!

Don't be fooled by all the incentives, USE CASH as much as you can. It will change your life! I know it did mine!