How Spending Cash Makes Me Spend More
At the beginning of this week, I had $10.00 cash in my wallet. I usually don’t ever carry cash. I use my Chase Freedom credit card for just about everything I spend. If I didn’t need laundry quarters then I wouldn’t use cash at all. And yet, for some reason, I felt it necessary to get an additional $10.00 in singles along with my monthly supply of quarters.
Fast forward to today and inside my wallet stands a single lonely dollar. All of his friends have gone away.
What the hell? Where did $9.00 go so quickly and quietly? I had to sit down and think about it for a while, retracing my steps to discover where all of those dollars went. Here is what I found.
Lunch Time Monday
I chow down my lunch, which happened to be leftovers. After returning a few phone calls and checking emails, I head back out to our test facility. However, ever so conveniently located between my cubicle and the building exit, is a vending machine. I make a few quick steps in an attempt to keep moving, but the temptation of the new large format Kit Kat is too much. I sent away one dollar for a sugar rush to get me through my day.
Amount Spent: $1.00
End of The Day Tuesday
I feel exhausted. I ran for exercise on Sunday and Monday and am feeling like I deserve a treat. There happens to be a Wendy’s on the way home from work. After a few moments of hesitation, I throw on my turn signal and zip through the drive through for a tasty frozen treat. It was delicious.
Amount Spent: $3.00
Start of The Day Wednesday
I am getting tired of the oatmeal packets I keep at work. For a slight change, I decide it would be a good idea if I had something a bit more substantial for breakfast that day. So off I go through the drive through at Dunkin’ Donuts and get a bagel with cream cheese. And a muffin too.
Amount Spent: $4.00
What’s Wrong with My Math?
That’s the worst part of it. I can only account for $8.00 out of the $9.00 I know I spent. I can’t remember ever spending it. It’s just gone. I’m not one to misplace money. I had to of spent it somewhere but for the life of me, I can’t remember where.
One dollar may not seem like much, but it is a full 10% of what I started with.
There are countless personal finance guru’s that praise the use of cash as a means to combine physical pain with the purchase of goods and services. Somehow, I don’t fit that mold. I don’t feel pain when I let physical cash slip through my fingers. What does hurt for me, is looking at my credit card activity at the end of the month and having to account for each and every penny I spend.
Often before making a purchase, I will have my card balance in my mind. I know how much I have spent in different categories and make spending decisions on the fly. That extra effort helps me to curb otherwise frivolous spending. But then, that is who I am, I’m weird because I like numbers so much.
Credit cards (and even debit cards too) are a useful way to track spending without looking like a weirdo carrying around a spending notebook. If I did not have that cash in my pocket, I would not have made all of those purchases.
- The vending machine does NOT accept credit cards
- $3-4 is too trivial an amount to put on a card. I would have felt silly paying for them at the drive through.
A little touch of social stigma would have prevented $8 (or $9) of frivolous spending in only three days time. Not that there is anything wrong with cash. People are different and respond to stimulus in unique ways. Finding what works for you is part of the challenge in personal finance. Remember that first key word, it’s called personal finance for a reason. It is personal because it is.