I know it’s been said before, but this tip really works for me. When you make a purchase with cash, I find there’s more of a psychological connection that you’re spending money. I’m not the first – almost every personal finance writer has had something to say on the topic. Trent Hamm talks about it at The Simple Dollar. Frugal Dad says it. J.D. Roth and Danny Kofke say it at Get Rich Slowly. I’m not the first to say it. But here’s why it works for me:
I find it embarrassing to have to put something back at the register. I blush and mumble and wish a hole would swallow me up. I really hate it. When I get ready to head out to the grocery store, I estimate how much my list should cost. I round up for tax, and if I’m on the lookout for some possible add-on items for dessert, or if I haven’t quite figured out what side dish I want to serve with a meal (yeah, right – as if I actually ever make a side dish), I add another $5 or $10. I leave my credit cards at home.
Inevitably, as I’m shopping, I’ll come across a sale item or a new beverage or a fancy cheese that I would love to take home with me. Before I switched to the cash method, that would just mean putting a bit more on the credit card bill. It’s absolutely amazing to me how much less I spend on groceries now that I only spend cash. The difference is in the add-ons. I won’t pick up a bag of chips now, because it’s not in my budget. And if I go over budget, I have to stammer at the check-out person that I need to put something back. I have to do the math in my head as the line behind me waits impatiently. I need to get the total down to however much green I have with me. Knowing that, it’s a lot easier to skip the things we don’t really need.
Some people have the determination to stick to a list exactly, and they are able to stay on budget that way. Some people can keep the idea that plastic = real money (plus interest) in their heads. Some people naturally keep their budgets down by staying away from the extra bottle of wine and the fancy cheeses. I am not those people. I can easily splurge into the $40 range for one meal. I once cooked a dinner of spaghetti and garlic bread that cost well over $20 per serving. I didn’t put truffles in that or anything – I just bought the most expensiveingredients possible. I have had to institute tricks and develop techniques to keep our food budget in check, and this is my big one: use cash.
It is important to realize why this works so well for me. I cannot express enough how detestable I find it to be if I cannot pay the total at the register. I feel like I can’t pay it because I’m poor. I feel like I am disturbing everyone’s day; the clerk needs to void the item, the poor bagger has to restock my item, the customers behind me in line are delayed by my inability to pay. I feel like putting anything back at this point makes me the problem customer. I feel ashamed for all of these reasons if I cannot pay the total I’m given at the register.
I know that these reasons are not necessarily true. I know that I did far more damage to myself by overspending than I will ever do to a clerk or bagger or other customers by putting something back. One day, I might not be embarrassed to send food back if I go over budget at the checkout. Someday, I might internalize the idea that by sending items back, I am being a good financial steward for our family. One day, I may be proud to stand in the checkout lane and declare that I am unwilling to go over my budget, so something must go.
Until then, I will use the shame to my advantage. I will cringe at the idea of running out of cash, and I will put unnecessary items back on the shelf before putting them into my cart. I will keep my credit cards away from the imported wines and artisan cheese, and I will maintain a budget that will serve our goals.
What is your best tip for managing your “in person” spending?