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The Power of Cash May 8, 2014

Filed under: Money Management — acgheen @ 12:00 am
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It’s a strange feeling pulling out a wad of bills. It isn’t the same as scrawling your name across the bottom of a check, knowing that the money is in your account. And it’s distinctly different from handing the cashier a plastic card with a magnetic strip so worn that it rarely functions. Cash is real. It’s tangible. It’s green. And it makes you think.

I’ve been using cash almost exclusively since last December. With the exception of a few bills paid through automatic withdrawal and a couple checks for recurring expenses, I use paper to pay for everything. I admit that making the transition from plastic felt odd at first. Unlike my credit card, cash runs out. If you don’t remember to replace it, you find yourself ready to make a purchase, but without anything with which to make that purchase.

This only happened twice before I remedied the problem with a “tiny emergency fund” (otherwise known as a $5 bill) stuffed into my coin pocket. It’s to cover the types of incidental expenses likely to crop up during an ordinary day, but not so much that it enables impulse spending. On mornings when I know I’m heading to the market, I’ll add a bit more (usually thanks to a reminder plugged into my iPod when I made my shopping list).

The system works well, but it has its side effects. For some inexplicable reason, cash isn’t just tangible, it’s emotional. The bills in my pocket have begun to feel a bit like friends… and I like their company. The result is that I find myself passing on many of the “incidental” purchases which previously marked my monthly credit card statement. Is it really worth trading Mr. Washington for Dr. Pepper? Not really. (My physician and I are finally in agreement on that.) Am I comfortable exchanging Mr. Lincoln for a hamburger? Nope. Does relinquishing Mr. Hamilton for a new book really make me happier than borrowing the tome from the library? Ok, well, maybe yes to that one… but I’ll spend a few days thinking hard about the question before I bid him adieu.

The truth is that cash, by its mere presence, provokes thought. But using cash hasn’t just influenced the amount of time I spend considering what and how much I purchase. It’s also drawn my attention to how blessed I truly am. What seems like very little when tallied in a bank book, is actually quite a lot when carried in a pocket. That wad of bills is about much more than just the power to make a purchase… it’s about the immediate ability to make a difference. (Seriously, when was the last time you tossed your credit card into a Salvation Army bucket?) Cash provides an avenue for generous, spontaneous giving as I encounter needs in the lives of others. It gives me not just a heart to help (I already had that), but the physical means to reflect that heart through my actions.

So each time I pull those bills out of my pocket, I weigh them in the balance. Is the purchase I’m about to make really necessary? And if not, is it really the best investment of my green friends? Such questions provoke thought. And that is the power of cash.


The Total Money Makeover: It’s All About Choices February 27, 2014

As I neared the end of my budgeting exercise, I began to panic. It was clear that I hadn’t been putting enough thought into the practical matters of life (like saving for the day when my truck finally gives up the ghost). But it was also clear that saving for those eventualities left me with far less to spend on the things in life that I enjoyed. How exactly was I supposed to make the most of my free time if I didn’t have a couple hundred dollars to spend on books each month? And what would life be like without Starbucks?

It was clear that if this was going to work, more than just my budget was going to require a “makeover”. While I acknowledged my relative wealth with my mouth (and with regular charitable giving), it was clear that the message had yet to reach my heart. I had enough, but I felt like I was impoverished. I had failed to recognize that the wise handling of money (just like everything else in life) is about our choices. Dave may have recommended that I dedicate a certain percentage of my income to retirement… but I didn’t have to. Budgeting money for the future was a choice I was making. Dave may have suggested that I consider spending less on food, but budgeting less was a choice. It was a choice between living with a sense that money controls me or that I control the money. The former brings a sense of slavery. The latter, an undeniable freedom.

Drawing a deep breath, I looked through my budget again – this time with an eye towards practicality and an intense focus upon the two categories to which my impulse spending was most frequently directed. Truthfully, there was nothing that prevented me from making coffee at home. Doing so would reduce my food expenditures by more than half and I could reduce that spending even more if I really tried. Likewise, I rarely had the time to read all of the books that I purchased. With the skill of a surgeon, I cut my budget to reflect the purchase of a mere two volumes a month. (If I needed more reading material, it was rumored that there was a nifty place in town called a “library” where I could go pick out books and take them home… absolutely free!)

I took Dave’s advice and put together envelopes for both of these impulse categories. With cash in each, I would be able to regulate my spending in ways that were nearly impossible when I used my “charge-it-to-the-credit-card-and-pay-it-off-at-the-end-of-the-month” method. Then, I gave the new method a try at the brand new health food store.

List in hand, budget in mine, I cruised the aisles admiring all of the delightful product offerings. I carefully examined my options for each item on my “needs” list and selected the most financially responsible products. Then, each time I picked up something that wasn’t on my list I asked myself, “Do I want to remove cash from my miscellaneous food envelope to pay for this?” One item after another went back onto the shelf, ear-marked for another day. I left the store having spent a mere pittance compared to the previous month… and each “treat” I purchased tasted twice as sweet!

I didn’t begin reading The Total Money Makeoverwith the belief that I needed help. By the end, it was clear that I did. Dave’s advice helped me to recognize that even those who handle money better than others, don’t necessarily handle money well. And that those who handle money well, can always be taught to handle it better!

The Total Money Makeover


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