Making the Shift to Living with Cash

Banks and retailers benefited greatly over the past decades by promulgating the cashless lifestyle. They convinced us that it’s much safer to carry plastic and more convenient, too. Cash, they declared, is old-fashioned and clunky. Plastic is hip and cool. Gradually, Americans fell for the pitch and, in turn, got more than we bargained for. Going cashless has turned us into a debt-ridden society.


But things are changing on the consumer front. Cash is making a comeback.

Some people, like reader Martin B., are moving to cash to avoid credit-card companies, collection agencies and others. Susan J. and her husband wrote that they’ve closed their bank and credit accounts because of past problems with overdraft charges and identity theft.

Still others like Bill and Jan W. are using money orders to pay bills. They cash their paychecks at their company credit union because it doesn’t impose high fees like check-cashing stores.

All of these people have gone to cash to avoid specific problems. But there’s another reason—perhaps even more noble than any other—that individuals are making the shift to a cash lifestyle: To reduce spending and improve savings. 

Countless studies have proven this fact: You will spend more when you pay with plastic—from 30 to 200 percent more, depending on which study you read. Paying with plastic makes it a lot easier to make unplanned purchases. Cash, on the other hand, is unbending. You simply cannot spend more than you have.

Making the shift from plastic to cash doesn’t mean closing your credit accounts. It means depending on cash, not plastic, for your day-to-day spending. It means planning ahead, shopping with a list, paying attention to what things cost, and often making tough choices required by the amount of cash you with you at the moment. You need a variety of active credit accounts to maintain an excellent credit score. But you don’t have to use them on a daily basis..

There are so many benefits to making the shift from a plastic mindset to a cash lifestyle. Living with cash improves your character because it requires personal discipline, accountability and responsibility. Cash promotes delayed gratification and discourages feelings of entitlement.

Here’s a simple way to make the switch reliance on plastic to dependence on cash. Get a stack of envelopes and write your various spending categories like food, gas, dry cleaning, kids, and so forth—one category on each envelope. Cash your next paycheck, leaving enough in the bank to cover those bills you mail or pay online. Divvy up the cash between the envelopes putting the amount you will need into each for groceries, gasoline and so on. Leave the at home, and spend from the envelopes. When an envelopes gets empty, no more spending in that category until the next fill-up.

At first you’re going to feel as if you’ve jumped into the deep end of the ocean without your water wings. But slowly, one day at a time, you’re going to find your stroke and that gentle rhythm of freedom that living with cash can give.

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8 replies
  1. Lori M says:

    I use cash whenever I can and I save the change in a giant plastic Coke bottle bank. It probably has about $800 in it now.

  2. Robert S. says:

    Be aware that your credit score will take a hit when closing credit card accounts. I have no idea what happens if you close a checking account.

  3. Lynda Ruiz says:

    At an airport car rental location recently there was a woman sitting there for hours waiting for a friend to pick her up because she could not get her rental car with the cash she intended to use. She does not use credit cards at all. There was a sign that you could only use a debit card with proof of return flight ticket. So, we need to realize there will be situations where a CC is necessary, but cash for most other things is the WAY.

  4. x_ray_tech says:

    What about the flip side of this using cash? Doesn’t anyone else ever notice the intense stares from “undesirables” who are watching you as you pay with ca$h and then follow as you walk out the door??? Is it just me or are there others who do not use cash specifically for this reason – safety precaution? Sure there is now epidemic of skimmers and other fraudulent ways criminals get your money. But those ways do not get you assaulted or killed in the process!

  5. Cheryl says:

    Hi Mary,
    Yes I have spent much less when I use cash as I THINK more about WHAT I am spending WHEN I actually am handing over BILLS not a piece of plastic!! LOVE your stuff!!! Aslways picjk up a tidbti f wisdom and sometimes EVEN an AH HA BIG realization, thanks for all that you share!


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