Does anyone still use physical cash? Why?

[Texasjack]

Ever been to Las Vegas? Of course not, I should know better than to ask. Ok, well, in Vegas or Atlantic City or Monaco or any other gambling casino town they use chips, not cash. In some places they're replacing chips with a card. Why? Because when you don't see cash, you don't think about what you're spending. It's just plastic.

If you take cash out of the bank and try to live on it, you'll quickly see how much it "hurts" when you're buying stuff.

Some mentioned that cash is hard to track. You're too young to understand why some paranoia about that is warranted.

Finally, what do you do in an emergency? When a hurricane hits and there is no power, your credit card is useless. You should always have some cash stashed away for an emergency.

 

[oldag]

Im 25, I've pretty much never used physical cash besides some garage sales. I've got a couple credit cards that have different amounts of cash back and try to get the most cash back. I have noticed that I have difficulty keeping track of my spending. It doesn't help it's spread out on a couple different cards now. I've mathed out I should be able to live off of $400 a month, but I'm way over. Which is not helping my financial goals. I wonder if I should try physical cash out for a while. With my current over budget spending I'm only getting about $200-400 a year in rewards. If I stick to my budget, the card rewards would be a fraction of savings.

Do you still use physical cash? Why do you use physical cash?

Thanks,
Higgins909

Using cash could help enforce fiscal discipline.

Also, you can set up a spreadsheet. List all the categories of expenses in rows, reasonably detailed (groceries, house, car, medical, entertainment, miscellaneous, utilities, clothing, etc.).
Put a budget amount in one column (column B for instance).
In columns E and higher, enter your expenses as you spend money. Enter EVERY expenditure, no matter what method of payment used.
In column C, have a formula summing up columns E through Z.
In column D, subtract column C (total actual expenses) from column B (budget). This will show if you have spent over your budget or you still have some surplus in that category.

You can also have rows for savings, etc.

 

[Fishkiller]

I think by now you have a good understanding that using cash is a tool to get your financial life on track. Once you have to put back a bag of potato chips at the grocery store cuz you do not have the cash on hand to pay for it, then you really start to live within your means. It is not easy at first and takes discipline.

 

[Bozz10mm]

"Cash only" has it's advantages, but also has disadvantages. It's fine if you rent your house or already own it outright. It's fine if you only buy used vehicles. But without some kind of recent credit history, you'll never be able to buy a house unless you have saved up a couple hundred thousand dollars to pay for it outright. I suppose you could pay cash for a new F150 if you saved up 40k. But try financing it without a credit history.

My son cut up his credit cards 8 years ago and has paid cash or debit card for everything since. Now he can't even get a credit card because...no credit history. Probably for the best. That's what got him into financial trouble in the first place.

 

[msharley]

Hey 909,


Since you have credit and all, do your best to keep it...

One other thing....


When you pay off your car/truck....keep putting that money in the bank!

Say with the payment/ins you are at $500/month. Car/truck paid off?...Put that $500/month right in the savings...

Drive that car/truck until the wheels fall off....

Purchase a good used vehicle for CASH. Keep putting that $500/month in bank...

($500/month is an example for payment plus full coverage...ymmv)

Later, Mark

 

[karlac]

Young folks have it tougher than us old codgers.

Establishing the credit they need in this day and age, to get basics like an apartment and turn on the utilities, pretty much requires some wisely used plastic in your past.

I use both plastic and cash - leave the credit cards in the safe (use them only for items I want some kind of purchase protection and/or proof of purchase, paid off every month); carry a checking account debit card that is tied to a purposely low balance account (with NO ties to any account for overdraft protection - if the bastards scam the debit card that risk is worth the benefit for me, YMMV); but always maintain access to sufficient cash in smaller bills to get the hell outta Dodge ... no hundred dollar bills in SHTF times.

IMNSHO Dave Ramsey is a wise man, for all times, not just these ...

 

[baboon]

What I have to ask is why the OP is asking about how to handle cash & credit& age 25? When I was 13 my dad said if I was going to be driving @ age 16, my ass needed to be saving money! At 25 I had been out on my own for 7 years.

My dad taught me about money pretty young. I was cutting grass for money plus other jobs kids did back then to learn if I didn’t earn it I wasn’t having it.

I get it it that some kids are never taught about money while young, or their parents are stupid about how it works! My wife still to this day is an idiot with her money, then again so are her parents. Her mom made a comment about the wife going to college and how great that was! My comment back was why in the phoc would you push a high school drop out into $30K debt?

 

[Geezer]

A friend and I were talking about this a couple of years ago. My friend's pockets are much deeper than mine and he was wanting to keep $100,000 on hand. Fire was his main concern. I suggested that he get 100,000 Susan B Anthony coins and put them in the bottom of his safe. This peaked his interest. While 100,000 was more than he wanted to try to find and store, he went on a quest to find some of the coins to store.

 

[baboon]

A friend and I were talking about this a couple of years ago. My friend's pockets are much deeper than mine and he was wanting to keep $100,000 on hand. Fire was his main concern. I suggested that he get 100,000 Susan B Anthony coins and put them in the bottom of his safe. This peaked his interest. While 100,000 was more than he wanted to try to find and store, he went on a quest to find some of the coins to store.

$1.00 coins are a huge pain in the ass in the bars at the renfest! Beer Wenches were trained to give them back as change.

 

[Brains]

It really is about how fiscally responsible you are. I use the crap out of credit where it benefits me. You're offering me 0% for 72 months on a car, or 3k cash back with a 2.9% loan. Back of the napkin math says I take the 0% offer. Rewards cards? Everything goes through them unless cash is cheaper. Balance is paid in full every month. Offer me a huge checkout discount for signing up for your in-store credit card? Sure! Then I cancel it after the bill is paid. Paying for 8k in floor tile, and if I use your card I get 0% for 24 months? No discount for cash? No brainer, I'm using your money.

I don't tend to buy things unless I need them, which is the first rule of staying out of debt. Pay the bills, invest the rest.

ETA: ALWAYS keep cash on hand at all times. You never know when plastic will fail you, and it does fail.

 

[Grumps21]

Put the plastic away. Half of living on a budget is the paper and math. The other is the spending. Go pull $400 out of the ATM and put it in your wallet. Better yet, put specific amounts into specific envelops marked for that purpose. Grocery budget gets put into grocery envelop. Gas budget to gas envelop. Want a beer but the beer envelop is empty? You’re done with beer for the month. No cards, nothing but ID and the cash. You will make it last, I guarantee.

Psychologically, it is harder to spend cash, especially as you watch it dwindle away. Plastic is the exact opposite.

ETA: I’m primarily spend cash or EFT bills/mortgage. While I have one credit card, that bastard only gets used for hotel reservations, airline tickets, and rental cars. When there is a balance, it’s paid in full on thw due date.

I agree that it is easier to rack up a credit card balance vs physically handing over cash. I really think the design of credit cards is to make it easier for us to part with our hard earned money while also providing an easy way to track said purchases. I fell into that trap, but let’s be honest, it is convenient to just whip out that plastic. There are no pump first then pay gas stations that I’m aware of, then there are toll tags that need a credit card for billing. I do fear that one day the cash system will be gone, leaving us with 100% electronic commerce. With the push of a button, one‘s purchasing power could be erased. I see this as a tool that can be used for nefarious purposes. Like you, I carry no balance. Paid off every month.

 

[toddnjoyce]

In 2020, I was hoping to have a house around mid 2022 if I budgeted correctly…I'm sure I have some other little expenses here and there, but if I can keep to this core budget, it would help a lot.

There’s two separate things going on here. First is knowing where every single dollar goes. That’s a backwards look…look back at May. For every dollar spent, track it back to what it was spent on. Paid $100 to a credit card bill? What did those $100 dollars get spent on when you look at the credit card bill?

When you know where (and how much)you spent, you can look forward to develop your next month’s budget. It takes about three iterations to develop a realisitic, repeatable budget.

You also have to track the income if there’s significant variability.

As for the house, I’m going to suggest that’s a longer term goal than near. Having owned multiple homes, the easiest way to stay broke is to buy a house when you cant afford the upkeep. Those nifty little mortgage calculators don’t tell the whole story, and you generally need to be in a home for 5-6 years just to break even at time of resale, assuming there’s no major repairs (like HVAC needing replacement).

I suggest renting until you’re at a point where you know you’re going to be stable for a long time.

Go to the library and checkout this book, it’s a good way to off on the right track.

The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness Amazon product ASIN 1595555277

 

[Sam Colt]

I agree that it is easier to rack up a credit card balance vs physically handing over cash. I really think the design of credit cards is to make it easier for us to part with our hard earned money while also providing an easy way to track said purchases. I fell into that trap, but let’s be honest, it is convenient to just whip out that plastic. There are no pump first then pay gas stations that I’m aware of, then there are toll tags that need a credit card for billing. I do fear that one day the cash system will be gone, leaving us with 100% electronic commerce. With the push of a button, one‘s purchasing power could be erased. I see this as a tool that can be used for nefarious purposes. Like you, I carry no balance. Paid off every month.

Same concept as income tax withholding. If everyone had to pay their income tax in cash each month, the system would have been fixed decades ago.

 

[Grumps21]

Same concept as income tax withholding. If everyone had to pay their income tax in cash each month, the system would have been fixed decades ago.

Yep, gotta agree with you. Straying from the subject of the string a little, but following your income tax comment, I have friends who still do not grasp the whole tax idea. They actually withhold more from their paycheck so they get a nice lump sum payout at tax season. This only amounts to no interest loans to the government

 

[Ozzman]

I try to keep at least $300 to $500 on me at all times... you never know when you will need it.
Just because you have cash on you, doesn't mean you need to spend it.

 

[baboon]

Yep, gotta agree with you. Straying from the subject of the string a little, but following your income tax comment, I have friends who still do not grasp the whole tax idea. They actually withhold more from their paycheck so they get a nice lump sum payout at tax season. This only amounts to no interest loans to the government

My wife has always done the same. I figure she learned it from her parents who both are idiots when it comes to money.

It gives me great joy knowing that I am better off financially then my in-laws. The sad thing is the wife will inherit nothing. And her last surviving parent will end up in a state run old folks home.

 

[Fishkiller]

There’s two separate things going on here. First is knowing where every single dollar goes. That’s a backwards look…look back at May. For every dollar spent, track it back to what it was spent on. Paid $100 to a credit card bill? What did those $100 dollars get spent on when you look at the credit card bill?

When you know where (and how much)you spent, you can look forward to develop your next month’s budget. It takes about three iterations to develop a realisitic, repeatable budget.

You also have to track the income if there’s significant variability.

As for the house, I’m going to suggest that’s a longer term goal than near. Having owned multiple homes, the easiest way to stay broke is to buy a house when you cant afford the upkeep. Those nifty little mortgage calculators don’t tell the whole story, and you generally need to be in a home for 5-6 years just to break even at time of resale, assuming there’s no major repairs (like HVAC needing replacement).

I suggest renting until you’re at a point where you know you’re going to be stable for a long time.

Go to the library and checkout this book, it’s a good way to off on the right track.

The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness Amazon product ASIN 1595555277

The Dave Ramsey system really works. We used it for a few years and now the only debt we have is a 0% loan on the wife's car and mortgage. House will be paid in about 4 to 5 years, and that was a purposed decision as we knew we would want to do a lot or upgrades so we saved the cash for that. Also paid for two weddings and put three kids thru college, with no incurred debt.

 

[deemus]

I use it for paying at gas stations, after having my cards compromised a couple of times.

This here. Plus my wife never knew everything I was up to when I used cash. And Joe Neighbor never took credit cards for that old 22 rifle he wanted to sell.

 

[TreyG-20]

I'm on a different path than most. Not married, no children and have no desire to have either of those things. My parents died at young ages. I expect to do the same and I'll have some fun before then. I have a healthy income not rich, but doing okay. Have a nice emergency fund and no debts, so I spend money on shit I want. If I die tomorrow or next year or in 10 years I'd be pissed if I didn't spend my money on things that make me happy. Don't over spend, but don't be miserable either. You don't know what the future holds and could spend your while life planning for something that never happens. If I had it my way I cut off paying into social security as well. I won't be using it, so in my eyes it is theft. So are taxes.

 

[craigntx]

Chips & cokes from the roach coaches.
I try to avoid their food but sometimes thats all thats close by