Why Cash is in for 2010
By energy_linguist, February 25, 2010, Personal Finance
Sure credit cards are fantastic in the short term. You feel empowered making larger purchases you’ve rarely dreamed possible: New furniture to match your new paint job, down payment on that awesome home theater system and media box, and so on.
Once the euphoria wears off, you’re generally left with a lurching stomach as you realize that an unhealthy percentage of your monthly income is slave to the minimum payment.
So why cash you say? Because in a still sluggish economy, cash may be your best weapon for gaining immediate control over your spending. Here’s a few things to consider:
- Cash makes you think, and think hard, about every purchase you make.
- Regardless of how awesome your will power is, plastic is a temptation that is VERY difficult to resist.
- Skip the death traps like 6-months no interest and buy what you can afford.
Imagine standing in front of that $250 subwoofer at Best Buy that you definitely don’t need but want like the dickens. Now two scenarios: Imagine that subwoofer experience knowing that you have a brand new, low balance credit card just sitting in your wallet and begging to be used. No bank account restraints and no immediate regrets (only when the bill comes later). Easy to just swipe that card and walk out with your new toy … oh I’ll pay it off little by little.
Now flip the switch and imagine that sub woofer with no plastic and a few twenties in your wallet that need to last for the week until you get paid. Are you less inclined to spend it if you know you don’t have anything to replace it with? Are you willing to sacrifice grocery and gas money for the week in order to buy a few CD’s and a new DVD? Much more difficult to spend what little money you have when you can watch the green physically disappearing from your pocket.
Cash is in … no doubt.
Image by Suvro Kahn
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