Thanks for voting!By Christy B., Cash Dieter and Savings Advocate
Recently, I stumbled across an interesting CNNMoney.com article on cash dieting. No, not crash dieting. Sorry, don’t believe in them. Cash dieting. You know, putting the freeze on credit, paying down some debt and living within my means. Novel, ain’t it?
I’ve been out of school a few years and have maintained one credit card with a low limit and a few store cards that I pay off pretty regularly. Recently, my husband and I transferred the balances of our store cards onto one credit card with a lower interest rate. The plan was to pay it down aggressively. But then I found out that it’s possible to earn rewards points for airlines and shopping through our credit card. Cha-ching. It was no longer a vessel to pay down debt. It became my holiday discount depot.
Then the article and the idea of an all-cash diet came along. And I thought, “That’s something we should do. I’ll get right on that….uh, after the holidays.” That’s when I realized that I rely on credit much more than I thought I did. And definitely more than I ever should. So once again, my credit cards are safely back on ice. And, hopefully this time, for good.
I’m going to see how this cash-only diet works out after the New Year and report on my progress here, for all the Social Media world to see and judge. I promise to tell mostly the truth, but I may leave out any weak moments or “slips.” I’m a Saver at heart. But I’m human. Any ideas or words of encouragement before I embark?
Tags: Cash-Only Challenge, Credit, Savings
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Also, if you have to travel for work, be sure to sign up for EVERY frequent shopper/flyer/hotel reward program out there! They dont cost money, dont require any kind of credit. I have gotten thousands of dollars over the last 5 years from them!
I also find myself relying too much on my multiple credit and store cards…and manipulating my purchases to maximize points accruals…but it is becoming unmanageable and stressful. I am inspired by your resolve and am going to try for the same! My boyfriend is already on that path…he has one credit card and pays everything else using his debit card, so he can track his spending better. I should follow his example! Good luck to us both!
This is a great idea Christy, I am trying to stick to a mostly “cash diet” as well. I had never had a problem with overspending until I opened my first credit card, and then all of a sudden, I found myself draining my savings account to pay off my card every month. Now, I have a very strict budget and I have a list of very specific things that I am “allowed” to put on my card - mostly things that I don’t have much of a choice about, like my mail order prescriptions and my monthly parking permit. I charge those things on my card - and that’s it. I’ve also taken my card out of my wallet and have it in a desk at home so I’m not tempted to use it while I’m out. Sticking to cash has been hard but it really does make you think about what you’re spending and it gets easier with time. Good luck to everyone trying this tactic, I wish you all the best!
I’ve been doing this for 2 years and I love it. The only card I use is my debit/check card which is the same as cash for me. So if the money isn’t in my bank account then I don’t buy whatever it is that I want. I don’t even miss credit cards and I’ve been saving more money because I’m not tempted to buy things I don’t need with the idea of paying for it later.
If I am reading right your interest rate is 2.something% why should I stay with ING with that low interest rate. I was thinking about having my husband’s retirement pension which we want to save and not touch put into ING not sure because of that rate?
Barbara Truitt
I survived credit card hell and now carry one credit card and one department store card. My balances are usually 0 unless I am traveling. I charge then pay off before the bill arrives. (My cc company recently told me my account was “unprofittable” and raised the interest rate.) I rely on my visa debit card. I recently read an article in a foreign newspaper about a woman who has been living with no money for the past 5 years or longer. She barters for everything. She does have her funeral paid for and gives away most of her pension to less fortunate. She started by resolving to not buy anything unless she parted with something else first. She now said she only needs the amount of clothes that fit on 10 hangers. She donated her books and relies on libraries for reading material. I was inspired by her. I am not sure I could live without money(and really, she does have that pension to fall back on if really needed), but for years, I have practiced this mantra before buying something: “How long before it shows up on my garage sale table or in a thrift store donation bin?” Surprising how that sentence can eliminate much unneeded purchases.
I’m proud to say I’ve paid off all my credit cards in the past year. A few years ago I went through a major financial upheaval and its taken me three years to get my finances under control. From that crazy period, I’ve learned a few things:
That $ 500 computer ended up costing closer to $ 1500 because of all the late fees.
Many companies are not easy to work with when you have a financial crisis - they still want paid, or they’ll gladly
add late fees so you owe them more.
Financial stress can make your life miserable and I much prefer to get a good night’s sleep.
Had to get a prescription filled, so I checked a few places for pricing. Amazing difference from $89 to $ 160 for the same prescription. So I went to the store with the lowest price…and the pharmacist said he could give me 10% off the RX if I signed up for the store’s credit card. For 10% - why not? When the card and info came a week later, I saw that their credit rate was 29.9% - are they serious? Close to 30% for the priviledge of a 10% discount. Aren’t they generous?
So that bill is being paid right away, and the account closed. It’s really important to check out these store credit offers before you sign up. Another lesson learned!
When I entered college, my Dad didn’t want me to have a checking account. I was to go to the Savings & Loan and get a cashier’s check to pay my bills. Eventually, I was so tired of waiting in line that I opened a checking account. I started budgeting by periodically setting aside money for clothing and other categories. After I had accumulated enough in the”account,” I could buy something. After I graduated, I got a part-time job, but it wasn’t enough to pay the bills, so I was able to get another part-time job and all was fine. I would eat out, but was never really able to save for big (ie, concert) entertainment or vacations. When I would receive money as a gift, I would put it in a special savings account for a down-payment or other large expense. My husband is much thriftier than I and I have cut back my spending. Our household expenses are on a joint card that we pay off monthly. I have my money deposited electronically and make five or so transfers to different accounts for different purposes–household expenses, savings, IRA, recurring payments. I have one personal credit card I use and almost 99% of the time avoid using store credit cards–I just spent them up too much. I cut the limit on my personal card from $12,000 to $500 which I also pay off monthly and most of my spending–gas, clothing is in cash. I need enforced savings, that is to set the money aside monthly, so that is my “cash diet.” If there is spending money in the savings account, I can make a withdrawal, but if it’s not there I have to cut back until I replenish the account.