Just-Cash June: Final Thoughts
June is over and I’ve removed the tape from inside my wallet. My credit and debit cards are free! Let’s take a look at how my household spending changed this month compared to an average taken over the past year:
- Total spending down 22%. We invested the difference towards retirement. If we’re able to permanently keep up this savings level, I could retire 7 years sooner! Think about that for a minute…
- Spending in “Auto” and “Entertainment” were cut in half. When’s the last time you paid for gas with cash? It’s a pain in the ass! And I remember turning down those extra drinks at the bar, since I never had an open tab. Amazingly, I got everywhere I needed to go this month, and felt as entertained as always.
- Spending in “Personal Care” and “Shopping” categories down 75%. I guess the added hassle of paying with cash and tracking my purchases was enough to get me to stop buying shampoo and other non-essentials.
[A few notes on the results: I deferred a couple expenses that couldn't be made with cash (e.g. new tabs for the scooter), so my spending for the month should be a tiny bit higher. Also, I paid no yearly bills this month (e.g. auto insurance), which makes this a relatively inexpensive month.]
I must admit I cheated a couple more times towards the end of the month: once to pitch in towards a class gift for my son’s teacher (money was being collected online), and once to have some books shipped to the boys at summer camp.
This exercise was eye-opening for me as it reaffirmed my belief that money is actually intangible and the paper or plastic we throw around are just abstractions of the concept of “money.”
The paper abstraction (dollar bills) are simply wired into our brains at a lower level than credit or debit cards, so it’s easer to remember what you’re trading away when you spend paper money. This concept is why casinos use chips for gambling. Chips are even more abstract than bills or cards, which makes people more likely to spend a lot of money at the casino. Imagine if you had to gamble with cash at the roulette wheel? That’s pretty much what I did all last month.
From now on, the trick will be keeping this mindset of being at one with my money, but adding the various convenient payment forms back into the mix. Let’s see how it goes!
A final thought: By not using credit cards, I kept about $60 in the local economy that otherwise would have gone to credit card companies in the form of transaction fees. Money-savvy people often like to boast about how they’re not helping the big banks get rich, but if you’re using a credit card, you’re syphoning profits off the stores you patronize, and moving that money to the banks’ bottom line.