Dealing with Cash

Dealing with Cash

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I am one of those people who will spend cash when they have it. Small purchases that I wouldn’t normally bother to charge, I will buy if I have cash on me. Basically, I have learned that having cash around is not a good idea.

I know that some people are the opposite. Cash may seem like real money to you. For me, I feel I have to be more accountable to debit charges than cash purchases. When I look at my bank statement, there is no denying that $45 spent at Target or $28 at Express. I am not one to keep receipts so tracking my purchases with cash is not practical for me.

When I have cash, I find myself going out of the way to deposit it at the bank, to make sure I don’t irresponsibly spend it. Then I have to go out of my way to the ATM to take it out, which often results in taking out more than I need and sometimes being charged extra fees. However, in the past month, I found a better way to deal with cash.

Out of Sight, Out of Mind

At home, I have a coin tin. I started putting all of my extra change in there, then decided it would be a good place for bills as well. The key to the success of keeping my cash at home like this is that the tin is not see-through and has a lid. Since it’s covered up, I forget about the extra cash.

If I am going out to eat with friends, instead of stopping by the ATM, I will check my cash tin first. If there is cash available, then I will bring only what I need. Many ATM’s only allow withdrawals in multiples of 20, which is just plain annoying when you only need $8. With my known habit of spending any cash I have on me, only bringing what I need is extremely helpful.

There is a trade off here. While I do like having the physical monetary limit, I do not like that I can’t easily keep track of my cash spending. On one hand, I know that $20 in cash was spent, but I am not sure where it went. On the other, I may not know exactly how much I charged with my debit card, but I can certainly look it up.

In general, I’m going to stick with my debit card because it works better for me. But for the times I am given cash, I will use my “out of sight, out of mind” technique to keep me from spending it all in one place.

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5 Replies to “Dealing with Cash”

  1. I’m like you with cash… it has to be deposited immediately or I’ll spend it more liberally than I’d use a card. I’ve come to realize that Bank of America is good at one thing and one thing only: having a lot of brick-and-mortar branches nearby in NJ/NY/PA (and probably the rest of the US). So I have a free checking account with them that I use solely for cash deposits, and as an easy way for my roommate to transfer me rent/bills from his own BofA account.

    Then I use USAA for the majority of my banking needs… good yields for checking and savings, great credit cards (for emergencies and boosting credit score only), great insurance plans, great customer service, and they refund other banks’ ATM fees. And they do ACH transfers to and from other accounts, so I can then pull the cash over from my BofA account and it’s available immediately.

    Finding USAA was good for my financial health and awareness because I started using all the great services they provide, and really maximizing my benefits from it all. They even offer a relatively cheap ($5.50/month) credit monitoring service. The kicker is their Deposit@Home service where you can scan your check and deposit it right from home, and it’s instantly available. Since they have few branches outside of Texas, it’s been necessary to use this unless you want to mail the check in and wait a few days. They’ve been doing that for a few years, and now their iPhone app’s Deposit@Mobile literally lets you take a picture of the check, and it’s deposited. Works flawlessly. And I swear I’m not connected to USAA in any way. In fact, I’ll stop advertising for them now :) Other local banks/credit unions have great benefits too… I know Somerset Savings Bank refunds external ATM fees as well, and most credit unions have great interest/loan rates.

    The opaque coin jar is an interesting idea, but I’d never be able to keep bills in there; I’m a bit obsessive-compulsive about this and I like to see numbers in my account(s), on paper. Or on a screen, I guess.

    Love the blog btw… stumbled across it while on your facebook. Are you on fatwallet and creditboards and similar sites?

  2. I feel the same about cash and do exactly the same with it as you do! It’s a pain if you sometimes do cash-paid jobs and have to make a trip to the bank.

    Plus, you don’t get rewards back on cash.

  3. I am the same way with cash BUT – so far this year, I am giving it one more try…..this is an attempt to control my shopping:
    Every Saturday I go grocery shopping, then I take out how much cash I think I’ll need for Miscellaneous stuff. Then I commit to only spending that amount.

    It has worked for two whole weeks, and believe it or not, I feel slightly empowered!

    Yes, it’s harder to keep track of….but this is something that I always thought I’d be “that kind of person” (i.e. someone who can’t keep cash on hand), but so far in 2010, I’m changing that!

  4. I was totally like you about my cash – before I decided to go cash only. That doesn’t seem to make sense, but knowing that I was not allowed to use an ATM except for my one withdrawal on Sundays, I turned into a Scrooge about my money! When I use a debit card, I often think, “Oh, I’ve got money to cover this!” I don’t track just how much those small purchases add up until I look at my bank statement online. You are right that it’s easier to let the bank tell me how much I’ve spent. Now, I like seeing how much I have to spend for a week in my hand. It makes me more accountable, surprisingly!

  5. @Varun: How quickly are checks sent through the mail to USAA deposited into your account? Since I have roomates, I deposit checks quite frequently and need access to the money no more than two days later. This is my only hesitation about switching to USAA. (I have no affiliation so I could not use the handy iphone app).

    @Secondhand Shopaholic @Red: Congrats and good luck with your new cash-handling methods!

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