We talk about getting out of debt and staying out of debt as a major step in securing your financial picture. The reason is obvious and has been espoused many times: it provides freedom in that you are not paying monthly payments, high interest and fees. What you can do with the money that you do not have to pay to creditors like this is move towards a cash-only lifestyle.
Cash on Demand. By cash-only we do not mean that you carry large amounts of cash with you at all times. Rather, you pay your budgeted items with cash that you have built up over time from your checking account that is fronted by a debit card. In fact, there are not many things that you cannot pay with a debit card. Even most Doctor’s offices now accept payment or office co-pays from credit and debit cards.
Reigns in Your Spending. By using a debit card, you also must have the cash in your corresponding checking account to cover the amount you are spending, so you avoid the other problem with credit cards that encourages you to spend more than you have.
Forces You to Be Responsible. If you have an item in your budget, then you can spend that money for that item. This is the simplest form of cash-in and cash-out system. The mindset that this encourages is for you to not spend what you do not have. This runs contrary to all of the advertising that you see for credit and credit cards in our society.
Gives You Peace of Mind. Do you recognize that feeling of being able to sleep at night knowing that your bills are paid and you do not have this dark cloud of debt hanging over your head? Do you realize how far that goes to provide you with a healthy life? Many connections have been made between the physical and mental well-being of people that prove this to be true. Less stress equals less physical ailments.
Blunts Emergency Budget Busters. When you live a cash-only lifestyle and have cash-on-hand for life’s little unexpected “joys,” you will find that they are more of an inconvenience than a major financial crisis. This also translates to your relationships. How many money battles are out there because there isn’t enough money to go around and pay for these types of unexpected surprises?
When you think of all the benefits from living a cash-only lifestyle it is just too good to pass up. Begin today to move yourself towards that goal. Take first steps like getting rid of one credit card at a time by paying it off and cutting it up. The good feelings are guaranteed to make your life better!
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Actually, I’ve operated on a 100% cash-only basis since 1988, for several reasons, both ideological and practical.
First and foremost, I see no advantage in letting a middleman hold my money and then require me to ask permission to access it (often for a fee).
As a sub-head, access may well be impossible during a natural disaster such as fire, flood, earthquake, or storm (tornado/hurricane).
Not only would you not be able to get your money out during these times, you wouldn’t be able to swipe a card at a grocery store, etc…if you had cash though, you could still get what you needed.
Secondly, in a bank, one’s money is publicly ‘visible’, which is to say that anyone with $250.00 and internet access can get a P.I. with a database subscription to locate one’s accounts and view their contents.
Of course, it goes without saying that both creditors and tax agencies could empty your bank account without notice…not to mention banks themselves can go bust (insured or not, your access is delayed).
Third, when one spends the money from a checking account or with a credit card, commercial concerns report the sales into a myriad of databases, often selling or renting the lists derived from those data to aggregators such as Central Point, who in turn provide the results of that aggregation to various other firms and government agencies, allowing them to ‘profile’ the individual user to an amazingly detailed degree.
Of course, if privacy is of no concern, this shouldn’t bother you but the results of losing that privacy may manifest in ways you haven’t considered…and relatively soon if the current economic situation is any indicator.
Rethink the perceived ‘convenience’ of banking and consider how that perception has helped to engender our current consumption-oriented and debt-based economy, there is a more rational middleground upon which to base a sustainable economic model.
My apologies for an overly long ‘rant’, even if this isn’t published, it was a good excuse to explore my thoughts.