Cash vs. Plastic

Last year, three of our credit cards were compromised by various data breaches.  One was compromised twice.

As a result of this, husband and  I decided that we were going to switch to paying everything we possibly could by cash.  It's been an eye opening experience in keeping us well within our budget. 

With our credit cards, we were able to charge when we didn't have the cash on hand.  If we couldn't pay the entire balance, that was fine.  We could carry it over to the next month, and with a fee, we could pay it off later.  Unfortunately, we were tending to let that amount that we carried over from month to month grown a little bigger each month. 

That's the danger of credit cards.  Easy money, and no immediate consequences.  Sure, the bills keep getting a little higher each month, but bottom line, they allow you to fudge your finances.

With the coming of the data breaches, we had a wake up call.  Our accounts were frozen while everything was worked out, and we were forced to switch to paying cash.  We'd been working towards it for a while, but then once the accounts were frozen, HEY, we had no choice anymore.

Our cards continued to accrue interest while they were frozen, though.  And the balances still needed to be paid off.

Meanwhile, we were attempting to pay cash for everything.  It's a rough switch when you go from paying credit for gas in the van to having $40 in cash to fill the van, and that might not be enough to get you back and forth to work every day during the week.  (So thankful gas prices have gone down this past month!)

So, yeah, we had frugal economies shoved down our throat a little faster than we wanted.  We had been working towards it for a while, but now we HAD to do it.

Eventually, we did work out the issues with the credit card companies.  They deleted all of the disputed charges, and sent us new credit cards.

New cards, that we could immediately start charging on - even though there were still outstanding balances on the other cards that had to be paid.

We talked it over and decided we weren't going to be sucked into the entire credit card scam again.

We've continued paying cash for everything since then.

It's been an interesting experience in cash handling & budgeting.

All of our Christmas presents were paid for with cash this year.  We set a budget and stuck to it.  I've been buying items since the beginning of November.  Several clerks in several stores have looked blankly at the cash I've handed them and asked me "What is this?"  When I reply "cash", they have had to call their store manager.  In one particularly memorable store, the manager asked if I could please pay with a credit card.  I replied no, I would not, and told her that I no longer wanted the merchandise and they could void the sale.  They then agreed to accept my cash, but I had to wait for the manager to get the change out of the safe in the office.

I've also had to teach several clerks how to count change.  It's becoming a lost art.  Because we have become so dependent upon credit transactions, many in our younger generation do not have a clue how to count change.

In the meantime, living within the very tight budget that we set after the last credit card breach, we've slowly gotten more of a cash flow- actual cash- than we've had in quite some time.  The first few weeks, we were lucky if we had $20 left over at the end of the pay cycle.  We ate a lot of soups, and a lot of beans, and cooked very creatively in order to cut our grocery bill back to the bone and free up more cash.  I honestly think we're healthier now that we're living lower on the food chain.  I'll find out for certain when I go in for my check up early next year.

Cash vs. Credit.  Living well within your means vs. living on borrowed time.

I'm a convert to the cash lifestyle.