BEST Advice You've Heard OR Discovered!!!

[heybro]

What are the Best Financial or Cost-cutting Advice You Have HEARD Or Discovered YOURSELF?  The more uncommon and nuanced the better!

1. Don't buy in bulk.
I realized after some time that loading up on things that were 'on sale' (especially food) only made me eat them faster and thus I never actually saved any money.  It is far better to just buy what you need for the week than to try to load up for the entire month/months.

2. Don't use credit cards.
Even though I paid off the balances each month, it is far easier to buy things when the money doesn't directly come out of your checking account.  I am sure cash would be even better but I've never made that plunge.

3. Wait.
If you still want something 6 months later, then you probably do want it.  Most things, after a few months, I no longer even want.

And YOU???????

[yodella]

My favorite quirky tip came from Mrs. Frugalwoods; as a way to avoid dining out, she recommends always keeping frozen pizzas on hand. They are perfect for nights you just have no time or energy to cook. Not a healthy meal by any means, but feels like a treat since we never order in.

We buy our frozen pizzas at Costco in multi-packs and they come out to around $3 each. I can't tell you how many restaurant meals we've avoided that would have cost much, much more.

[Eric222]

My favorite quirky tip came from Mrs. Frugalwoods; as a way to avoid dining out, she recommends always keeping frozen pizzas on hand. They are perfect for nights you just have no time or energy to cook. Not a healthy meal by any means, but feels like a treat since we never order in.

We buy our frozen pizzas at Costco in multi-packs and they come out to around $3 each. I can't tell you how many restaurant meals we've avoided that would have cost much, much more.

Ironically, the dominos 2 blocks from my house has carryout larges for $6.  That's Wednesday night for the kids and I.  I think $6 for a their "yay! We get to have pizza night" is worth it.

[velocistar237]

Speaking of the Frugalwoods, the best tip I've heard from them is to embrace the imperfect. Too often people spend a lot of money fixing little things. For example, if your car makes a benign noise, the best thing you can do is learn to live with it.

[TravelJunkyQC]

Apart from the basic "spend less than you earn and invest invest invest", another great piece of advice (that I witnessed from my parents instead of heard per se), is to learn new skills constantly. Yesterday, my partner and I put away our winter clothes and got out our summer ones (we live in a small loft, so putting away our winter coats down in our storage space in the basement allows us to bring up summer clothes and bikes, skateboards, etc). I always use this twice-yearly switch as an opportunity to give clothes away. I found that we each had about 3 or 4 items that we would be wearing if it weren't for little holes/rips/hems that have come undone. Hence, I spent the evening sewing, and as such, have fixed great clothes that would otherwise have gone in the garbage for someone less willing to learn how to mend things.

[acroy]

1) 'You don't own stuff. it owns you' Consider the liability of the purchase. The new shiny gizmo or whatever has has an animal appeal ('gotta have that!), but training the mind to think about the hassle of maintaining, storing, etc helps remove the desire.

2) 'If you haven't touched it in 6months, get rid of it.' This really helps with decluttering. Helps to reduce the initial urge to buy something too: imagine owning it, how much am I actually going to use it.

[GuitarStv]

I'm going to add some qualifiers to the first two items in the original post:

1. Don't buy in bulk just because it's a bulk purchase.  Make sure that you need the item, and make sure that you would have planned to use it anyway.

Buying in bulk is a great way to save money.  We buy 5lb bags of lentils, 10lb bags of chickpeas, 20 lb bags of flour, and 10 lb bags of oats for the pantry regularly.  They always get used and are way the hell cheaper than smaller portioned stuff.

2. Don't use credit cards if you have trouble controlling your spending.  They're great otherwise.

We use a cash back credit card for about 98% of our yearly purchases.  This means that we get a certain percentage of our purchases back . . . for doing nothing.  We treat a credit card exactly the same way we treat a debit card, or cash . . . because it is the same as buying something with cash or money directly from your bank account.



My own tip would be:

Cook a couple very large batch (10 - 16 portion) meals every weekend.  Eat a bit through the week, but freeze most of them.  After several months of doing this you will have a freezer fully stocked with different meals that just need to be thawed and heated in the mircrowave.

Cooking a large batch doesn't usually require much more cleaning than cooking a small meal, and doesn't take much more time.  It makes grocery shopping/planning very easy, and you tend to have less leftover specialty ingredients that will go bad in the back of the fridge.  You can get a bit creative and do fancier meals than if you were cooking every night this way, so you get to try more different foods too.

This is a tremendous time saver, and has helped us eat out (or order takeout) only once or twice a year at most for the past several years.

[ReadySetMillionaire]

What are the Best Financial or Cost-cutting Advice You Have HEARD Or Discovered YOURSELF?  The more uncommon and nuanced the better!

1. Don't buy in bulk.
I realized after some time that loading up on things that were 'on sale' (especially food) only made me eat them faster and thus I never actually saved any money.  It is far better to just buy what you need for the week than to try to load up for the entire month/months.

2. Don't use credit cards.
Even though I paid off the balances each month, it is far easier to buy things when the money doesn't directly come out of your checking account.  I am sure cash would be even better but I've never made that plunge.

3. Wait.
If you still want something 6 months later, then you probably do want it.  Most things, after a few months, I no longer even want.

And YOU???????

Point 2 is kind of silly. A credit card gets you perks (on the backs of other clowns paying interest) and also provides you with infinitely better security than a debit card. Just treat it exactly like a debit card and you'll be fine.

Best advice for me:

(1) Passive index investing. It's simple, makes sense, and has avoided a lot of stress I thought I'd have when entering my career.

(2) Save as much as you can and as early as you can. The notion to "save 10-15%" is so well ingrained that I didn't even think about it. I'm glad that I realized that I could save way more than that at a relatively young age.

[boarder42]

What are the Best Financial or Cost-cutting Advice You Have HEARD Or Discovered YOURSELF?  The more uncommon and nuanced the better!

1. Don't buy in bulk.
I realized after some time that loading up on things that were 'on sale' (especially food) only made me eat them faster and thus I never actually saved any money.  It is far better to just buy what you need for the week than to try to load up for the entire month/months.

2. Don't use credit cards.
Even though I paid off the balances each month, it is far easier to buy things when the money doesn't directly come out of your checking account.  I am sure cash would be even better but I've never made that plunge.

3. Wait.
If you still want something 6 months later, then you probably do want it.  Most things, after a few months, I no longer even want.

And YOU???????

Point 2 is kind of silly. A credit card gets you perks (on the backs of other clowns paying interest) and also provides you with infinitely better security than a debit card. Just treat it exactly like a debit card and you'll be fine.

Best advice for me:

(1) Passive index investing. It's simple, makes sense, and has avoided a lot of stress I thought I'd have when entering my career.

(2) Save as much as you can and as early as you can. The notion to "save 10-15%" is so well ingrained that I didn't even think about it. I'm glad that I realized that I could save way more than that at a relatively young age.

i find it pretty humorous that of the 2 threads started one BEST advice and 2 the WORST advice by the same OP.  The advice on each Original post would be better suited for the other thread minus number 3 on here. 

1. use self control and you will come out way ahead

2. use self control and you will come out way ahead

3.  this is an example of self control.

[boarder42]

anyways mine are

1. max tax deffered accounts - it will cut over 2 years off FIRE

2. Keep a 30 year mortgage to term at today's rates.  it is 1 faster to get to FIRE and 2 safer once in FIRE as a giant inflation hedge

3. passive investment in index funds

4. travel hacking with Credit Cards - the game is slowly drying up but its been worth over 10k in travel to me in the last 2 years.

[neo von retorch]

1. Recurring costs! Keep them low. Minimize subscriptions and monthly costs as much as possible. Cable TV, internet, car insurance, cell phone. Anything that is an ongoing cost - minimize it. Shop around. Then do it again in six months. These costs tend to creep up. (Like moving and my car insurance just went up ~$100 / year... sneaky bastards.)

2. Save first. It's easy to spend your income. You adapt to whatever your paycheck is, or whatever is left after saving. So get those retirement deductions going, and sweep money off to savings (online savings out of sight is great!)

[Fishinshawn]

Create a budget, use YNAB or something similar, and stick to it

Millionaires are made $10 at a time (thanks Mr. MMM)

Just becoming aware of the amount of money you waste on a daily basis can help you change your mind set. I don't always make the right choices, the other night I had to drive to the market to purchase a gallon of milk. My flashlight was dead so I couldn't bike it and walking would have killed the whole night, so I drove. I wanted to punch myself in the face for driving the 2 miles to the store for a stupid gallon of milk, but the awareness helps me make better choices more often.

I found a lot of time and money waste surrounding my fitness, I was driving my lazy butt to drop kids off at school, I was driving my butt to the gym, to go run on a treadmill or the elliptical. I cancelled my gym membership, and now I run on the street. I don't drive my kids to school they ride their bikes and I run, I needed the exercise and the extra time together is a morning adventure!

[Tester]

1. Wait.

I just had to accept some RSUs today.
I looked at the total number of shares I got in the last 10 years - and sold when I needed money for "important things".
The important things were mostly my house, but still...

If I kept all the shares and sell them today I would get 600,000 USD.
You can imagine that I don't have that amount...
I only have around 100,000 positive net worth, including that house (which I could sell for around 70,000 USD ):).

But, although I knew that the shares would rise, I did not know they would rise 10x in 10 years.

Now, I also realize that in those 10 years the company could have gone bankrupt, but it is still a funny feeling.
With 600,000 USD I could retire in my home country - not to mention I would be much closer to retirement even in the USA :).

Now, to the second lesson:

2. Stay the (good) course

After 5 minutes of thinking (again, I get to think about this once a year :) ) about the above, I let it go and focused back on what I have to do today and from now to be in a better spot in 10 years.
I know that you can't predict the future and timing the market doesn't pay off (although in this case I had information which made me "know" the shares will rise).
I also sold the shares to put money into my house so it was a "good" thing to do. Not the "right" thing as I should have waited more to start building a house...

So, I will continue with saving as much as I can and hopefully in 10 years I will be very close to retirement - although I have to increase the savings to be able to do that :).

[heybro]

I stand by my 'Don't use credit cards!'  I don't care about all those points - those are earned on the backs of rising prices to pay for those perks as the store eats that extra percent.  I did notice a difference when I started using my bank card instead of those points cards.  It worked for me.

My advice may be quirky but it works for me.  I still believe the starbucks advice is so overplayed and lame.  Everyone that says 'cut out the starbucks' to me, isn't living in my world at all.  I would never drink coffee, let alone pay five bucks daily for it.  Give me advice I can use!  That's why I dislike the starbucks line.

[GuitarStv]

I stand by my 'Don't use credit cards!'  I don't care about all those points - those are earned on the backs of rising prices to pay for those perks as the store eats that extra percent.  I did notice a difference when I started using my bank card instead of those points cards.  It worked for me.

Your advice is to treat the symptoms, not the problem.

The symptom is that you spend more with a credit card.  The problem is that you appear not to realize that credit is your money, just like debit or cash.  If someone doesn't share your problem, your advice doesn't make any sense at all.

[Fishinshawn]

okay stay out of Mcdonallds, burger king and Taco Bell eat food from home? That better than starbucks?

[boarder42]

We did just give you advice you can use. You have a spending problem with a cc that you don't have with a debit card. That is a fundamental problem. If the first step is cutting up credit cards the last step is reopenomg them and using them appropriately.  There is no downside to a credit card if you possess self control and an understanding of your money. Why does it matter what  piece of plastic you use to pay in your mind.

I get 6% off at grocery
3% off at the pump
And all of the risk reduction a credit card has.

Not to mention travel hacking and all those insane perks to the tune of 10k per year.

Based on your first 2 best advices (which actually are terrible advise) you should exam your self control issues.

[RavensBrew]

1) 'You don't own stuff. it owns you' Consider the liability of the purchase. The new shiny gizmo or whatever has has an animal appeal ('gotta have that!), but training the mind to think about the hassle of maintaining, storing, etc helps remove the desire.

2) 'If you haven't touched it in 6months, get rid of it.' This really helps with decluttering. Helps to reduce the initial urge to buy something too: imagine owning it, how much am I actually going to use it.

Number two is really resonating with me right now. I have tons of tools and house repair equipment I haven't used in 5+ years. Out it goes!

[heybro]

Your Mileage May Vary Is an Actual Thing.

Buying in bulk makes me spend more per year because if I've got 10 cases of something in the cupboard, I end up eating it sooner than if I bought one per week.  For me (not for everyone) it saves me money by not buying in bulk.

I do spend less when using a bank card versus a credit card.  That is my experience and the numbers are real.  It is not about self control but some psychological influence.  The different is like 100 bucks a year (300 versus 200).  Saving that 100 is worth not having 2 percent cash back on 100 bucks.  That is what works for me.  I am not telling you to give up your plastic rewards cards.  I am saying it wouldn't be the best thing for me. 

Just a reminder, this is not a religion and even if it were, all religions have variations on them.  So, if I prefer a bank card with no rewards and you prefer rewards cards with cash back, let's not act like both aren't valid cause they are.  YMMV obvi.

[heybro]

okay stay out of Mcdonallds, burger king and Taco Bell eat food from home? That better than starbucks?

No because I never eat out.  This advice is like kindergarten math to me or something, which is why I am tired of hearing it.  haha

[PhysicianOnFIRE]

The Rule of 72 for compound interest.

Don't keep up with the Dr. Joneses.

Live like a resident (a.k.a. someone with a median salary) when you start making good money.

[boarder42]

The point is your advice you think is good and bad for you is actually the fundamental opposite of what most people need to understand in reality. Esp on a FIRE site

And the fact that you eat more bc its there and spend more on a different piece of payment are both self control issues you can deny it all you want but that's what it is. Self control is psychological and contrary to popular belief is something you can control.

If you didn't notice your third best advice also deals directly with self control. But is a way to practice fixing self control issues. The other 2 are just bandaids as stated above.

Specifically buying in bulk when items are on sale. A core fundamental mustachian practice.

[RocketSurgeon]

'Don't take advice from anyone that you don't want to be more like.' is my favorite.

(Don't worry, I do want to be more like you guys.)

Also, 'Stand up straight.' is the best advice my Dad ever gave me. I didn't even realize I was walking around staring at the ground until he told me.

[teen persuasion]

Best advice I'd discovered: do your own taxes (using the IRS booklet) and DO THE MATH to understand how the parts interact.  That's when I learned just how much extra we could save from 401k and HSA contributions, since lowering AGI raised our EITC.  Since the phaseout rate is ~21%, and our state matches at 30%, we can gain up to nearly 50% (10% fed, 4% state, 21% phaseout, 6.3% state match, and 7.65% FICA for HSA part).  Even for the 401k after we hit 0 fed tax, we are at least getting 31.3% increase in our refund; almost no chance of hitting 0 state tax, the deductions/exemptions are ridiculously low, and we hit max EITC well above that level.

[ReadySetMillionaire]

I stand by my 'Don't use credit cards!'  I don't care about all those points - those are earned on the backs of rising prices to pay for those perks as the store eats that extra percent.  I did notice a difference when I started using my bank card instead of those points cards.  It worked for me.

My advice may be quirky but it works for me.  I still believe the starbucks advice is so overplayed and lame.  Everyone that says 'cut out the starbucks' to me, isn't living in my world at all.  I would never drink coffee, let alone pay five bucks daily for it.  Give me advice I can use!  That's why I dislike the starbucks line.

There's a hint of irony in this post. On one hand, you subscribe to the "no credit cards" rule because it works for you, despite the fact that pretty much any personal finance enthusiast would advise you to do the opposite. 

On the other hand, you completely dismiss the "no Starbucks" rule because you are so well versed in personal finance habits that it doesn't make a difference for you. "Give me advice I can use!," you say.

Well, here's some advice: credit cards provide you with much better security. That money you treasure so much in your checking account is a hell of a lot safer if you're making purchases on credit.

Think about it. Every time you pay with any card, you become a little more susceptible to a hack of some sort. If somebody hacks your debit card, poof, that money flies out of your checking account and it's quite difficult to get that money back.

Meanwhile, if someone hacks your credit card, your money is still safe. It hasn't gone anywhere. You execute a simple online form to dispute the charge and it barely caused you more than five minutes of stress.

I can speak on this from experience. While I was in law school, I was a victim of the big hack at Target. Poof, $390 and $470 gone from my checking account. It took almost two weeks to get that money back.  And just this year, somebody used my Amex to buy an $1,100 piece of fitness equipment. I discovered that on Sunday night and the charge was gone by Tuesday. And no money ever came out of my account. 

So, your perception of credit cards is flat out wrong. They provide a great benefit to protect the money that you value so much. Your increased spending with credit cards is a direct result of bad habits on your part, and has nothing to do with which piece of plastic you're using. You're couching it as "I can see a difference" and "it's psychological," when quite clearly you just need a mirror and some self-discipline.

[Mr. Green]

"You will be become like the 5 people you spend the most time with." If the 5 people you spend most of your time with aren't what you want to become, it's time to change who you associate with.

Similarly, "Where you are in 5 years will be the sum of the books you read and the people you spend your time with." Both of these focus on the power of your brain. Most of us don't realize just how powerful it is and what it will do if fed the right things.

[boarder42]

^^^^ exactly.  This is the same concept on the buying in bulk. 

Lets relate it to someone dieting. 

Step 1 get rid of all sweets in my house b/c i'm a sweet aholic

....


Step X -  have the self control to not eat sweets just b/c they are there.

You're likely going to be places with sweets around and the ultimate realization that you have made it is that you can look it in the face and not do it.  So while buying what you need when you need it may be a good first step, you're missing out on likely double the cost savings of buying in bulk when on sale and then using when you acutally need to use it. 

case and point i just bought 30lbs of bacon at 1.50 a lb b/c its on super sale right now.  do we eat bacon normally.  NO but we do when we find it onsale and then we can freeze it b/c we like it.  but this applies to every thing you buy.  if i feel like making hamburgers today i dont go buy hamburger and make them.  i wait til its on sale for 1.50 a lb vs 3-4bucks and then i freeze it so if i feel like a burger i thaw it out a couple days early and then i eat. 

you're costing yourself likely 2-3x what you could be if you bulk shopped appropriately for things you would be eating anyways.  you decide what can be made based on what you have on hand.

[The Happy Philosopher]

1. Don't burnout from your career. I know this may be a little counter-intuitive on a FIRE site, but for most people their earning power is their greatest asset, and cutting back to part time or retiring early is very financially destructive especially at the higher income levels. It's better to love your job and work 20 years than to detest your job and retire in 15. Not only do you have much less money, but likely you are much less happy as well.

2. Massive decluttering: After getting rid of massive amounts of crap and keeping only stuff that brought us joy (yes, Konmari method) it was amazing how reluctant I was to buy new stuff. Really changes mindset.

3. Mary someone that shares your financial values. This matters more than fees, what kind of IRA you invest in and whether or not you buy or rent. Huge financial differences often lead to divorce which is a financial weapon of mass destruction.

[MrsPete]

3. Wait.

Waiting to make a purchase is a good idea.  If you see something you want but walk away from it, chances are pretty good you won't think about it again and won't return to purchase it.  An alternate -- I do this with clothes fairly often -- buy it, but keep it in the bag for two weeks.  Try it on again, and if you still love it, pull off the tags and keep it.  Otherwise, return it (I don't mind doing this at all; some people, like my brother, find it humiliating). 

We buy our frozen pizzas at Costco in multi-packs and they come out to around $3 each. I can't tell you how many restaurant meals we've avoided that would have cost much, much more.

Another alternative:  When you make a casserole, spaghetti sauce, or similar, make 2-3 batches and freeze 1-2.  It's not really all that much more effort, and then you can eat nearly effort-free later.

Speaking of the Frugalwoods, the best tip I've heard from them is to embrace the imperfect. Too often people spend a lot of money fixing little things. For example, if your car makes a benign noise, the best thing you can do is learn to live with it.

Yeah, I've realized that my delayed gratification muscle is set significantly higher than most people's.  For example, I like to watch home improvement shows on TV.  Those people tend to say things like, "The renovation has to be done in 4-5 weeks.  We just can't wait longer to get into our  new house."  Huh?  For a nicely renovated house in which you could live the rest of your life you can't wait a couple months to get it right?

The symptom is that you spend more with a credit card.  The problem is that you appear not to realize that credit is your money, just like debit or cash.  If someone doesn't share your problem, your advice doesn't make any sense at all.

Hamlet said, Nothing is good or bad, but thinking makes it so. 
While saying nothing may be a bit of a stretch, the concept is correct. 

okay stay out of Mcdonallds, burger king and Taco Bell eat food from home? That better than starbucks?

Since you can never list all the specific places where money could be wasted, how about getting to the bottom of the problem:  Don't fritter money away mindlessly on small pleasures that disappear quickly.  This covers coffee, fast food, magazines, pedicures and so many other things.

No because I never eat out.  This advice is like kindergarten math to me or something, which is why I am tired of hearing it.  haha

You're being too literal.  Generalize the thought.

[HPstache]

I stand by my 'Don't use credit cards!'  I don't care about all those points - those are earned on the backs of rising prices to pay for those perks as the store eats that extra percent.  I did notice a difference when I started using my bank card instead of those points cards.  It worked for me.

Your advice is to treat the symptoms, not the problem.

The symptom is that you spend more with a credit card.  The problem is that you appear not to realize that credit is your money, just like debit or cash.  If someone doesn't share your problem, your advice doesn't make any sense at all.

I thought this article was good regarding this topic:

http://www.moneycrashers.com/you-spend-more-money-when-you-use-a-credit-card/

How do you know that you don't spend more with credit than you do cash, honest question?

[GuitarStv]

I stand by my 'Don't use credit cards!'  I don't care about all those points - those are earned on the backs of rising prices to pay for those perks as the store eats that extra percent.  I did notice a difference when I started using my bank card instead of those points cards.  It worked for me.

Your advice is to treat the symptoms, not the problem.

The symptom is that you spend more with a credit card.  The problem is that you appear not to realize that credit is your money, just like debit or cash.  If someone doesn't share your problem, your advice doesn't make any sense at all.

I thought this article was good regarding this topic:

http://www.moneycrashers.com/you-spend-more-money-when-you-use-a-credit-card/

How do you know that you don't spend more with credit than you do cash, honest question?

With regards to cash, I dunno to be honest.  I've avoided using cash as much as possible for the last 15+ years.

Many years ago (right after university) I tracked all of my spending very carefully.  At this point I had a credit card that offered no benefits at all, but had no yearly fee.  Because I didn't want to be bothered transferring money into the credit card account, I didn't really use it at all for a couple years . . . everything was always purchased on debit.  After a couple years my girlfriend (soon to be wife) found a cash back credit card, and I got one.  I spent a couple years exclusively using this credit card because if offered cash back.  You know what the difference in purchases were for these times?  Nothing, except that I was making a certain percentage cash back now.

Because they're all the same damned thing.  Money is money.

When I buy groceries, I make a list of stuff we need to do the cooking that we planned for and buy that stuff.  Method of payment doesn't matter because I don't impulse shop at the grocery store.  When buy a bike part I'll check out what the local bike shop has, check out what the internet has, and then get the part that I need.  If I need some nyquil or something from the pharmacy I go there, look for the cheapest option, and get it.  When I go to the gas pump, I fill up the tank, pay, and leave.

Your article mentions an example of 'going out to eat' and having a hard limit imposed by holding cash.  We eat out once or twice a year, so I've never really needed to set a limit for this activity.  I'm struggling to think of a scenario where this kind of mentality would really take hold if you don't ever impulse buy, and always wait for a bargain.

[GuitarStv]

There's also this study, which shows that credit card usage doesn't increase consumption:  https://www.andrew.cmu.edu/user/incekara/CreditCardStudy%202012.09.21.pdf

[plainjane]

If you have inconsistent income streams, treat them like a business would and give yourself a salary.  Don't modify your spending to match your cashflow.  You can give yourself an annual bonus if your salary averages out substantially lower than the income stream, but make sure that you still leave enough to weather several months of potential future downturns with your "salary".

[boarder42]

There's also this study, which shows that credit card usage doesn't increase consumption:  https://www.andrew.cmu.edu/user/incekara/CreditCardStudy%202012.09.21.pdf

exactly for a non mustachian i can see how CC's may help over spend.  but as a mustachian you should either

A. have a budget and stick to it

or

B. have a natural knack for budgetting internally and understanding what everything costs.

contrary to your shopping plan i go to the grocery store completely open ended i have an idea a few things i need but if i see things on sale i can use in the future they get purchased.  cheapest fresh meat i buy if its actually close to bottom price etc.

[Uturn]

I volunteer as a mentor in a program helping mostly young people as part of their jail release and probation.  I have found that a 20 year old just trying to get through life sober really has no concept of retirement.  However, they do understand freedom.  When I am giving them money advice, I tell them that their money can either buy stuff or buy freedom.  Freedom from a dickhead boss, freedom from bill collectors, freedom to make decisions because "want to" not "have to."

[loyalreader]

The credit card vs. cash arguments is missing a point. Most companies have stopped offering a discount for paying with cash. Which means, most companies have added the 3% that they expect to pay to cc companies to their products are services. So, if you aren't paying for goods/services with a low-to-no annual fee reward card that you pay off every month... it can be argued you are paying more for those goods/services than cc users.

I generally pay cash for gas at a station that gives a discount near my house (lowest price in the area) and at the few mom & pop places that only take cash. Otherwise it's the card. I can see the argument re: the psychological effect of using a cc but... think it can be overcome.

[ketchup]

"Don't be an idiot" changed my life.  Whenever I’m about to do something, I think, "Would an idiot do that?" And if they would, I do not do that thing.

[Dmy0013]

Best Advice I ever heard or was given

1 - Read Rich Dad Poor Dad - Now whether or not you like the book or agree with the book, this is what got me started saving and thinking outside the box

2 - Dont let someone else lose your money for you

3 - Go to the bank apply for a mortgage, get pre approved - tell the bank you would like to see the physical cash before you agree to anything...  Thats right they don't have the money... it does not exist... Just a weird thought that again got me thinking about what money really is, and how it really works...

[swick]

"Question all your beliefs and figure out where the hell they came from and if they serve you"

How many of our beliefs/habits/views of the world did we adopt without conscious thought? We were given them by our parents/culture/religion/societal customs/friends/media....

Do they work for us? Are they true? "why" do I believe this thing?  What "Rules" am I unconsciously living my life by?

Once you start looking at why you hold the beliefs you have, you can consciously choose if they work for you, or if you are living someone else's beliefs and ideals. Once you get into the habit of questioning, you look at everything with a new light and can create the life you want.

[Ann]

My favorite is "Nobody cares more about your money than you".  This was said to me to encourage me to invest and research my investments, not just hand it over to some financial planner and not think about it. 

http://www.moneycrashers.com/you-spend-more-money-when-you-use-a-credit-card/

I find the credit card debate a little confusing/ amusing.  Are they truly advocating using cash - like paper bills and coins? - or debit cards?

The article states that CC are a trap because one missed payment and you lose. True!  But who misses a payment?  One overdraft fee and you lose [edited from typo loose], too.  Don't do it.  And I do not feel comfortable carrying around a ton of cash.  Plus, it doesn't seem as real to me because the bank numbers are already decreased so I am more free with it.  That's a mental error, but how I work.

I reason CC vs cash is like recommending protein shake supplements.  If you are trying to body build, then it is a less expensive way to get concentrated protein.  If you are already at a daily caloric surplus, it will just add fat.  You have to understand your circumstances, and there is no one-size-fits-all answer.

[HPstache]

My favorite is "Nobody cares more about your money than you".  This was said to me to encourage me to invest and research my investments, not just hand it over to some financial planner and not think about it. 

http://www.moneycrashers.com/you-spend-more-money-when-you-use-a-credit-card/

I find the credit card debate a little confusing/ amusing.  Are they truly advocating using cash - like paper bills and coins? - or debit cards?

The article states that CC are a trap because one missed payment and you loose. True!  But who misses a payment?  One overdraft fee and you loose, too.  Don't do it.  And I do not feel comfortable carrying around a ton of cash.  Plus, it doesn't seem as real to me because the bank numbers are already decreased so I am more free with it.  That's a mental error, but how I work.

I reason CC vs cash is like recommending protein shake supplements.  If you are trying to body build, then it is a less expensive way to get concentrated protein.  If you are already at a daily caloric surplus, it will just add fat.  You have to understand your circumstances, and there is no one-size-fits-all answer.

The missing the payment thing is only the 1st part of the article.  The second part describes the psycological benefits of using actual coins and bills. 

I used to be on the "use credit card for perks as long as you always pay off bill completely" bandwagon for years and thought I was pretty damn frugal.  My wife and I switched to cash only for our 8 spending categories where cash made sense to test the theory because we had read about it and thought it would be a fun experiment.  What we both found was that taking out $1,200 in cash at the beginning of the month for all of these spending categories (what we always had budgeted for with our cards) was actually a pain we did not experience as much paying off our CC.  Seeing that cash laid out at the beginning of the month made us think, "OK, surely there's got to be $50 somewhere we can take out for next month" and so we tried $50 less from from grocery for that particular month.  We have these type of reality checks all the time now and it's really based on the fact that we see and feel the cash... unless your a robot (which some of the people around here might actually be) there is an emotion you experience handing over cash rather than swiping a card. 

Honestly I believe it's one of those things you need to actually try to for about 3 months to get the full affect.  I mean, 2% cash back is two pennies on the dollar, is it not plausible that using cash only might have the tiniest affect on spending habits to overcome that perk?  Who hasn't had that experience buying something big like a new car and taking out cash for it and realizing just how much $5-$10K looks and feels like vs. a cashiers check or big CC bill.

[MoneyCat]

1.) Buy in bulk: Long-term savings always trump short-term savings. The trick with this one is that you need to have self-control. Of course, that's the key to all financial well-being.

2.) Use credit cards instead of debit cards: As long as you are sticking to your budget, credit cards are the better option because after the CARD Act, debit cards are unable to give the same level of rewards as credit cards. All prices are designed with those swipe fees in mind anyway, so you may as well get the rewards instead of giving extra free money to merchants.

[Ann]

First of all, I apologize for the loose/lose error!  Dumb.

I really am curious to hear more from the cash only people.  I don't think my way is only way, and certainly not right for everyone.  I do use credit cards for everything, but not because of rewards.  I only just signed up for a rewards card two months ago because I realized I might as well.  For years I didn't.  What psychological benefit CCs gives me is tracking spending.  If I buy something, it's recorded.  I log all my spending, so that's helpful.  And I can't "forget" about it.

My question is: do the "cash only" people buy things online?  How do you account for that in your budget?

How much money do you carry around with you?

Do you have a credit card? Debit card?  Do you ever have circumstances where you are presented with a largish bill (car expenses, vet expenses) that exceeds your cash but needs to be paid that same day?  How do you accommodate?

Would cash only decrease my spending?  Maybe.  But I could always withdraw more cash. And blow my budget, just like I could blow my CC budget.   And  I wouldn't be as good as tracking expenses - I know because I wasn't before I used CCs.

I do admit it's awesome to have cash when trying to split a restaurant tab for a group if the group is quibbling.  I can do math and I paid attention to what my choices cost.

[neo von retorch]

It's not dumb! It's any easy mistake. I've made it. I probably wouldn't have pointed it out if not being all grudgy this morning because my web host took 4 hours to respond to my virtual server being down for nearly 12 hours, plus arguing with a friend about politics on the book of face. (Now that's dumb!)

I used to use "cash only" as a way to reduce spending, because so much of my spending was online impulse purchases, and I just wouldn't make these unnecessary purchases during my "cash only" financial diet. These days, I use four credit cards to get 2-6% back on everything... things I'd (almost) always buy anyway, like groceries, gas, internet and cell phone. But that 2% "universal" card that serves as a fall back still gets used a bit more than I'd like, as does the card that gives me 5% back on Amazon purchases...

[SwordGuy]

I do spend less when using a bank card versus a credit card.  That is my experience and the numbers are real.  It is not about self control but some psychological influence.

Ok, I'll bite.

It's not a self-control problem, it's some psychological influence on your brain instead.

If it was a  self-control problem, it would be YOUR OWN brain influencing you do to the wrong thing.

So, my questions for you are:

1) What or who is broadcasting this "psychological influence" into your brain (apparently against your will)?

2) What means are they using?   Psycho-kinetic manipulation of the neural dendrites?   The Force?  Nagging?   Enquiring minds want to know!

[HPstache]

First of all, I apologize for the loose/lose error!  Dumb.

I really am curious to hear more from the cash only people.  I don't think my way is only way, and certainly not right for everyone.  I do use credit cards for everything, but not because of rewards.  I only just signed up for a rewards card two months ago because I realized I might as well.  For years I didn't.  What psychological benefit CCs gives me is tracking spending.  If I buy something, it's recorded.  I log all my spending, so that's helpful.  And I can't "forget" about it.

My question is: do the "cash only" people buy things online?  How do you account for that in your budget?

How much money do you carry around with you?

Do you have a credit card? Debit card?  Do you ever have circumstances where you are presented with a largish bill (car expenses, vet expenses) that exceeds your cash but needs to be paid that same day?  How do you accommodate?

Would cash only decrease my spending?  Maybe.  But I could always withdraw more cash. And blow my budget, just like I could blow my CC budget.   And  I wouldn't be as good as tracking expenses - I know because I wasn't before I used CCs.

I do admit it's awesome to have cash when trying to split a restaurant tab for a group if the group is quibbling.  I can do math and I paid attention to what my choices cost.

Good questions.  First of all, you're right it's not 100% cash only for us.  We pay our re-occuring bills like normal human beings with online banking transfers and checks.  It's only our 8 spending categories which are cash only: Grocery, Restraunt/Dates, Pets, Vehicle Maintenance, House Maintenance, "free spending" money (mine & hers), & gifts.  She has a zipper purse that has 6 pouches for the categories that she is "in charge" of and I have a wallet that has three partitions in it for the categories I am "in charge" of. 

My wife and I do still have credit cards which are essentially only used for online purchases... which was the biggest issue we ran into when we first started budgeting using cash.  The solution we came up with I think is pretty cool and it works really well for us.  We started a little "bank" in our cupboard which is a large mason jar which is filled with cash.  Any time we make a transaction online with our cards, we perform that transaction with the mason jar bank in our cupboard.  So if I buy a $35 hammock on Amazon, I pay with my card, then I walk over and take $40 from my free spending money put it in the bank and take $5 change.  With this method, letting the cash run through your fingers, you get the visual of what you are spending and what is remaining in that particular category.  When our CC statement comes out on the 31st of the month (had to request this from them), the amount due should be almost exactly what's in the jar if you are doing it right.  That cash is put in the bank, the cards are paid off and we start the next month.

Currently our spending categories add up to about $1,100... she carries about $850 of it (she is a SAHM who does all the grocery, pets, houseg, gifts, etc.) and I carry about $250. 

We pay our gas with our debit cards because we get a discount for debit here in WA and enjoy the conveinence at the pump.

I know this sounds super convoluted to a casual reader, but I'll tell you that it rocks our financial world in a good way.  It got our spending under control, constantly pushes us to try and cut our spending, and really makes us more conscious of what we are spending.  There is no real "need" to keep track of each purchase, because the amount remaining in that category tells you how much you have left.  Any money that is left over at the end of the month goes to a "fun" category, like for instance right now it goes toward our trip to Alaska this summer.

[mcj]

I stand by my 'Don't use credit cards!'  I don't care about all those points - those are earned on the backs of rising prices to pay for those perks as the store eats that extra percent.  I did notice a difference when I started using my bank card instead of those points cards.  It worked for me.

My advice may be quirky but it works for me.  I still believe the starbucks advice is so overplayed and lame.  Everyone that says 'cut out the starbucks' to me, isn't living in my world at all.  I would never drink coffee, let alone pay five bucks daily for it.  Give me advice I can use!  That's why I dislike the starbucks line.

Never is a strong word.
Why, may I ask, are you so adamant about never drinking coffee?

[Ann]

I know this sounds super convoluted to a casual reader, but I'll tell you that it rocks our financial world in a good way.

Actually it sounds awesome!  I seriously wonder if the all cash thing would make a big difference for me?  Actually it probably would reduce some impulse spending?  It's okay, though, because I have my own convoluted way of doing things which I love.

[Zikoris]

Ok, the whole credit card thing puzzles me. Here's the process I go through when I go grocery shopping (and have for years and years), and I want someone to point out which step would change based on using cash vs credit.

1. Make a list at home from doing kitchen inventory check, and reviewing weekly flyers.
2. Go to store and get the things on that list. Make brand substitutions for price whenever possible.
3. Get an appropriate volume of produce for the week, getting whatever vegetables are cheapest.

Anyone?

[boarder42]

Ok, the whole credit card thing puzzles me. Here's the process I go through when I go grocery shopping (and have for years and years), and I want someone to point out which step would change based on using cash vs credit.

1. Make a list at home from doing kitchen inventory check, and reviewing weekly flyers.
2. Go to store and get the things on that list. Make brand substitutions for price whenever possible.
3. Get an appropriate volume of produce for the week, getting whatever vegetables are cheapest.

Anyone?

well when you have a credit card with 20k limit and not just the cash you need to buy that.  you also

1. buy a coffee at the starbucks on the way in
2. buy some fancy snacks they are advertising at the front of the store. 
3. impulse buy a new gluten free item in the gluten seciton
4. pick up a soda at check out
5. ooo and there is Kim kadrajfad;lfkja butt again i have to get that magazine.
6. and then you stop by customer service on the way out for lottery tickets b/c you can buy that with a CC in my state.