I agree! Cash only holds you to your budget better than any other method. Scanning a piece of plastic just isn't the same as handing over a dollar bill.

Thanks,
Nate

Congratulations on becoming debt-free soon! And, more so, to being free to pursue your life dream of writing for a living! I know these feelings very well and count them as two of the happiest moments in my life! I worried that I'd take these things for granted someday; but, so far (1 and 2 years later), I'm happy to report: not ... even ... close!! : )

By cash only are you including debit cards or do you mean only paper and change money? I am not sure if I would want to give up the debit card.

I use one credit card with a reward system and pay it off IN FULL each month. Since I started using it about three years ago, I've not incurred any financial cost, interest or otherwise, and have gotten about $300's worth of rewards.

If you can control your spending with a CC (and pay if off fully and timely), it can be a better deal than a cash-only system.

If you don't have that kind of self discipline and hate dealing with paper money, than a Visa/MC debit card would be a great solution.

Everything that you listed can be accomplished using credit cards as well. I am 4 years debt free (except for my mortgage, which is only 26% of my income). I use a credit card for everything and pay it off at the end of every month. I know exactly when I can afford to spend, and I have worked hard to resist impulse purchases. If I want to make a large purchase I save, and when I have enough money I buy the item on the credit card and pay the card off at the end of the month. The difference is that I both get cash back and more importantly buyer's protection with the credit card. I have only had to use the chargeback option on my credit card once (after I exhausted all other options but the seller still refused to refund my money) but it was well worth it and I got my money back. I also average about $400 a year with cash back, which is free money to stick right in my savings account. The key is to be responsible with your budget in general, not to use a specific form of currency.

I am applying for my new Fidelity 2% cash back card, which means I am getting 2% back on all purchases into my brokerage account. If you are smart with your money and don't have a problem with spending too much, this is a great way to make yourself more money while you're spending. :)

I think the cooling-off period is key in big item purchases. Paying with cash forces you to avoid impulse buys. Nice post.

Good post, I completely agree that going green is the right approach. Using cash requires discipine but inspires confidence in both your ability to self regulate as well as knowing that there is not a pending backlash when the monthly statements roll in.

Thanks for sharing these great reasons for using cash... I also like that I clicked for 6 and got 8... what a bargan!

Dave

My only concern with a credit card-less lifestyle is the need for a credit history to get financing for big purchases like a home or car. It's not impossible without credit cards but it does seem to help.

However, I do recognize that you can get a car without financing by saving up, and getting a house is certainly not a necessity.

Congrats on becoming debt-free and cash-only! It's always interesting to see what techniques people use to take control of their finances and get out of debt.

@Neal - the documented studies range from 18% to 22% in increased spending with magnetic strip credit cards. However, the newer cards using 'pay pass' have increased spending from consumers another 5% to 7%.

The Anti-Cash Crowd - my wife and I get a lot of flack for living 'strangely' on cash, driving old cars with 250k miles+ and not upsizing our house after having two boys. Seemingly everytime I have a conversation about getting rid of the plastic, there is an incredible amount of pushback. From where I sit, I'm happy to have zero car payments, a mortgage payment less than half that of the people that think we're strange, and know that it's physically impossible for us to pile up any more debt. Cash is a beautiful thing...heck, have you seen the engraving jobs these guys do at Treasury? Damn they're good.

I agree with your post. In the past, I thought I was being smart using credit cards so I could get the rewards. I always paid in full so I wasn't in debt; but I also wasn't saving what I wanted. When I switched to cash/debit card only, I realized I simply didn't spend as much. I would buy clothes, but return them later because I realized that I didn't really need them, and that the money would be much better in my account. However, with a credit card, by the time I got the bill, even if I realized I had spent WAY too much, it was usually too late to return anything.

If some people TRULY don't spend a penny more using CC than cash, awesome! However, I think at least some of us will spend more. Maybe not much more; but 10-20% more.

congrats to you for being cash only...it's truly anti-cultural to be that way today...your 6 points are great...hats off to you for being almost debt free...my wife and I use the envelope cash system for groceries...when the cash runs out we don't buy anything else until next pay period. Good post!

Not long ago I was in Macy's and bought a top, using cash. The clerk looked at me like I was an alien!! Oh, my she actually had to count back change. It looked like she had not had to count back cash in forever. Actully never counted it back, just put it in my hand. I told her please count it back. She stumbled and mumbled.

Hubby and I do have a cc for car rentals, etc. But pay off at the end of the month. Also have a debit card. For some reason if we are purchasing something big, i.e. an appliance, furniture I prefer to put that cash in our checking account and then writing a check. Just further proof of purchase. And less chance of being robbed.

Otherwise, we deal mostly in cash, other than big ticket items and bills.

You know Bob, it is better for a male especially to not have a fat wallet. My hubby was having hip and low back problems, doc told him to quit sitting on a fat wallet it causes the spine to go out of whack. So, now hubby will carry his wallet, but he puts his cash in a front pocket. Course you could also do like hubby, if you're married, for some reason I always end up carrying his wallet, keys etc in my purse when we are out together. Then he grumbles my purse is so heavy--++GEEZ i wonder why

I have to ask: Since you are "cash-only" do you own a home (mortgage) or do you rent?

I prefer debit cards to cash. Why? I can track what I buy (or at least where I go, and I have a good memory). In addition there are certain auto-pay items that don't take cash: my tollway tag and my universal insurance policy.

Congratulations on becoming a writer. I've been one for the past twenty-one years (technical) and find it rewarding, even though my career and my college degrees don't match up (BS in Business and an MBA).

Tisha, it sounds like you already made that transition, so this post should be called something more like "How using cash taught me a valuable lesson" or something like that.

Sounds to me like you're ready to use your card in a responsible way and take advantage of the perks of using a credit card.

The Writer's Coin  |  Follow me on Twitter

Great post, Tisha. 

Just thought I'd remind the commenters who say they use credit cards so they can reserve flights, rent cars, etc - that most of the time you can do the same with your bank debit card.  Most bank debit cards work like credit cards when it comes to wanting to reserve your travel arrangements or pay for things you can't with cash.  To the retailer, they're receiving a credit card payment, but for the consumer, they're still on a cash-only budget.

I love the idea of cash back credit cards, but for me, I know I would also be very tempted to carry a balance if money got tight once in awhile, and prefer to work out a cash-only system, too. Thanks for the tips!

I have been Cash Only for decades, but now if I try to start new phone service. They say they are unable to indentify me. Why, because they still rely on the BIG THREE CREDIT REPORTING COMPANIES. Maybe we should have CONGRESS look into this, as I never gave the credit reporting companies permission to have my social security number, and as I always pay cash (American Dollars), why are they allowed to discriminate against me?