Monday, March 12, 2007

Day 6 - Results - Credit Card/ATM

This blog about using cash instead of using a credit card or ATM could be very short - Bottom line: I saved $300 during the month of February, and I attribute that savings directly to only using cash...going to the banker during banking hours, taking out a set amount of cash, then budgeting that cash as needed until the next planned bank visit.

It's not that I was a "big spender" prior to the project...I would just fall into what I call the Target Trap; i.e. go into Target for some toothpaste, walk out of Target $150 later with some greeting cards, a small vase, some socks, trail mix, and that latest and greatest book I'd been meaning to read...oops, I forgot to buy the toothpaste! The Target Trap (please feel free to insert your chain all-purpose store of choice) would happen to me about twice a month. I would get to the checkout with very little concern of the total checkout price because I knew I would be paying with the credit that moment, there was no specific reason why I couldn't purchase all those somewhat "impulse" items.

During the project (using only cash) my spending habits really changed. Holding actual cash in my hand (something I hadn't really experienced for quite some time) made me much more mindful of how I was actually spending my money. One example: I became more aware of what my spending habits were supporting...i.e. I really tried to support local shops and grocery stores during the month and completely avoided corporate mega stores. Yes, the local shops were a little more expensive...that was okay - I just consumed less. It felt really satisfying to support the local economy. I also enjoyed the shopping experience that these local shops provided....friendly, helpful employees and quality products (even though the selection of products was only a fraction of the selection you would find at a corporate equivalent...but, really, do I need to be bothered with 30 different choices of mustard?)...more about grocery shopping when I write about food. You get the idea - by holding cash, money became "real"...something that in every transaction had an underlying effect on others...when using a credit card, reflection on these effects often came as an afterthought. However, throughout the project, they were right on the forefront every time I laid the bills and coins down on the counter.

I would normally go to the bank every third or forth day and take out about $50. I tried to budget between $10-$20 a day. For the first time in my life, this included budgeting gas. And for the first time in my life, I was forced to make a decision to not drive somewhere because I didn't have enough cash to put more gas in the tank. So I made alternate plans...I walked to town and went to the the library instead - it probably was better day than if I would have followed through with my original plans that involved driving somewhere. Wow! I do consume a lot of gas. I never thought I did. Work is reasonably close; so are most of my friends. However, it felt like I spent so much time putting gas in my car...because of my cash budget, I could never fill up (or even come close to filling up) - I liked to have a little reserve cash in case something unexpected came up the next day. I now really think about my gas consumption. This is a result of the project that I didn't anticipate.

In terms of the ATM, I actually didn't use the ATM much pre-project...but I now realize that just having it in my wallet gave me this extra feeling of "spending security"...if a place didn't take credit cards (such a rarity these days), I could always go around the corner and get cash from an ATM machine...i.e. there was always an avenue which assisted me in my consumption...whether I could truly afford to consume or not.

So the credit card and the ATM were tucked away in a dresser drawer for the month. It was great not having them in my wallet. With limited cash, I spent/consumed less, consciously spent/consumed when had to, and enjoyed the human interactions that occurred in the process...from the banker, to local grocer, to the guy behind the counter at the gas pay at the pump!

Changes: The ATM remains in the drawer, the credit card is back in the wallet. I don't know why...I managed fine for 30 days without it...maybe I'll have another "credit card free" month in April.

Day 7 - Results - Appliances


Michelle D said...

I just spent 30 minutes on line catching up with your project - I'm at work (that's nice). So now that I've been here for almost two hours, I guess I should try tackling a few work items ;) I love your project! I'll be googling you later.

Anonymous said...

Love this blog, especially the part about credit cards. I actually usually use cash but still carry the cards in my wallet, I never use the credit card but keep it there "just in case". I never really realized that there is almost nothing that could truly be a big enough emergency to need the credit card (I keep and emergency fund)therefore I realize that this is just some strange attachment to the card. Maybe I need to follow in your footsteps and leave the card home in the drawer.