Wanted to check in with everyone, since this is the half way pont of Just-Cash June. The half-month has gone by quickly, and I’ve gotten into the swing of things, buying with nothing but cash. I wouldn’t say it’s habitual yet, since I still look at that taped-off pocket in my wallet where the credit cards reside.
I must admit I slipped up the other day, trying to buy an album on Amazon. I thought I had enough store credit to make the purchase without a charge to my credit card, but part of the credit had some fine print that I didn’t read, and couldn’t be used for buying the mp3s. It wasn’t until after I did the 1-click checkout that I saw a small charge to the credit card. Oops! (Don’t ever use 1-click if you can help it. Mp3 purchases on Amazon require 1-click)
I can already say that I’m reaping the benefits of spending only cash. One of the tips in Your Money or Your Life is to write down every purchase you make, since the simple act of having to take out a piece of paper and write it down is enough to prevent some purchases. I read that tip and thought it was quiant in our day of online budgets and credit card statements, but now that I’m tracking every purchase manually, I see how it does impact one’s spending behavior. It’s a pain in the ass, and I wouldn’t wish a lifetime of manual expense tracking on my worst financial enemy.*
In fact, I’m happy to announce that I’m on track to cut my non-food spending in half so far this month! I’ve invested an additional $150 so far from all the things I didn’t buy. It might not sound like much, but if I keep that up until I retire, that becomes an additional $2,000 of income per year in retirement**. Imagine telling your boss you stopped using a credit card and he says “Joe, I’m so impressed, I’m giving you a $2,000 raise!”
I’ll check back in with y’all again at the end of the month.
* In case you’re wondering, my worst financial enemy is anyone who claims to be struggling to make ends meet on a 6-figure salary.
** Here’s the math behind my claim: if you invest $300 a month for 10 years, in a way that earns 6% after inflation, you end up with about $50,000. If you withdraw 4% of that sum, you get about $2,000. Here’s a simple and powerful compound interest calculator I use for stuff like this.