Should you go cash only to deal with a debt addiction? It can’t hurt. [The Simple Dollar]

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  1. stacy75 says:

    yaaaaay, Dave Ramsey!

  2. KogeLiz says:

    ‘Cash only’ has been the biggest pain in the ass for me.
    Hotels, airlines, buying things online, rental cars, etc.
    I was probably a little worse off though, because I ended up in a situation where i couldn’t even use a debit card.
    Plus if I have cash on me, it’s easier for me to buy things… smaller purchases.

  3. swalve says:

    Yes it can hurt. This isn’t curing the disease, it’s merely treating the symptoms.

    I over eat- if there are Doritos in the house, I’ll eat them until I explode. So I don’t buy Doritos. But I’m still an over eater. Just as a spendthrift without credit is still a spendthrift.

  4. dysthymia says:

    It might be good for some, but I think the best solution for me would be keep record electronically and why not in paper. instead of keeping the envelops, have handy a small notebook, or if you want quickbooks for your pdf/iphone or something similar, and write down every single financial movement. all of them. gum? 25 cents, down.

    This helps in two ways. the first one is the fact that you are facing the numbers all the time. Sucks yes, makes you think in the deep hole you are, but is not for long. Soon changes into a feeling of control. believe me, and that is the second way. Empowers you, makes you feel like you are in control of your money, nevertheless, it’s yours.

  5. forgottenpassword says:

    One little thing you can also do while using cash only…. is to just spend the folding money & put all the coin change in a jar until its full. Then stick it in an account you dont touch. Its amazing how fast it can add up.

    This is for people who have a problem saving money.

    I did this a few years ago for the heck of it & it was kinda fun. But I have prettymuch been responsible with my money since I was a little kid. And now I use a credit card for most purchases (but still have a small quart change jar that takes forever to fill.

  6. haimtime says:

    A secured credit card where you put the money ahead of time may be a solution to the online problem.

  7. ganzhimself says:

    Going “debit card only” has been pretty helpful. I at least can see where all my money goes, where with cash I don’t think twice about it and rarely retain a reciept.

  8. Murph1908 says:

    I went cash/debit card only for about 5 years. The first thing I bought with a credit card after this period was an engagement ring.

    It really changed my attitude towards debt and balances. I paid 1 month interest charges on that ring, and 1 month on a laptop a year or so later, but other than that, I keep my cards paid off. I’ll make 3-4 payments on a card online per month, because I hate having a balance whatsoever.

    My credit score before the cash only period was in the crapper. It’s now well over 700.

    Cash only was hard sometimes. For a friend’s wedding, early in this period, I had to give them their gift a month or 2 late, simply because I didn’t have any money, and the tux and other expenses for the wedding wiped me out. Had I planned it better I’d have been fine, though.

    Not trying to brag, just trying to advise. Do it. It’ll change your life.

  9. HRHKingFriday says:

    @dysthymia: Well yes, but checking accounts count as cash. If you still can’t handle having a card, which I understand, try withdrawing a certain amount every week as your spending money. Hey, it worked when I was 15 and had a 20 buck a week allowance.

  10. johnva says:

    The underlying problem is overspending and not budgeting, not the method of payment. And cash actually makes it more difficult to keep accurate records, which in my opinion are vital for following a budget strictly. But if you have so little self-control that you will literally spend whatever you have in your pocket, go for it.

  11. theblackdog says:

    Considering that it’s much easier to pay my bills online, I won’t go completely cash only, but I am leaving the credit card at home and using my debit card only. I’ve shaved off almost 1/6 of my CC debt already.

  12. hanoverfiste says:

    I have been on Cash Only since September of 06. Considering I was paying at least $100 a month in overdraft fees. So that would make $1,500 or more.

    I use an envelope system like Dave Ramsey uses, setting a side a quarter of my rent out each week, paying utility bills as they are due etc.

    Currently, I just cash my check at a check cashing place. They charge 1%. Which is still far less than my overdraft fees.

    For online transactions I use Netspend.com. It cost $2 or $3 to load money on the card. I paid $75 a year for unlimited transactions. (You can chose $1 per transactions, $10 a month, or $75 year).

    I have complete online access to my account. I can y transfer the money to a savings account that has an interest rate of 5%.

    You can pull money from an ATM, and it is possible to have direct deposit into the account. I have used that for my tax-refund.

    If there is no money in the account, the charge will just decline. You do not get overdrafts.

    So I am paying less than I did in overdraft, am stress free, and have better control on my money.

  13. hanoverfiste says:

    oh year, I have been able to use my netspend card to rent a car