Off-topic post …

My wife is constantly reading about the banks and lending institutions, and likes to read to me every gory detail she learns. Occasionally I do listen. About a month ago she made the comment “If the banks do go under, we’ll have to go back to cash. That will be strange.” I thought about it for a while and I realized just how true that was. I seldom carry cash. I do a lot of my shopping on the Internet. Can’t really do that with cash very well. I used the credit card for everything … even the occasional Starbucks triple-shot-Hoff-inspired-venti-iced-coffee-with-splenda-shaken-not-stirred gets a credit card swipe. Then my wife says “Let’s see if we can go for a month without spending on the credit card. Just cash!” Being the contrarian that I am, I decided “What the heck, let’s try it.”

We failed miserably.

The whole thing about spending cash is you have to go somewhere and get cash before you can spend cash. An important small step. We had a minor medical emergency and we were not about to slow down and get cash first. When you take enough out to cover expenses, the bank teller’s get weird and antsy like you are doing something wrong. Trying our best, by the end of the month, we looked at the results, and we were only 60% credit card, 40% cash by dollar amount. But overall, our spending and it was down quite a bit. While we hear about how much easier psychologically it is to spend money when it’s not cash, I see just how true that is. Either you reel yourself in because you are not sure you have enough cash on you, or you feel a little more attached to the money that the concept of money and hold back on some purchases that are not necessary. So we are going to try it again this month, and we think we can reverse this to 60% cash, 40% CC.

I have never been mugged. I have never had my wallet stolen, and I am not really worried about carrying some cash around. I have had fraudulent charges on my credit card, more than a dozen times, and I am constantly worried about my bill having bogus charges. I usually state that the reason I use credit cards so much is that I have reduced risk. Lost or stolen, I am only liable for $50.00. Airline tickets and hotels are a nightmare without a credit card. And I would never buy something on line without the ability to shield myself from bogus merchants. But my perspective has changed that, given most common situations, cash has a lower risk than credit and changed my behavior in a positive way.

It’s been an interesting experiment, and I think we are going to keep doing it for a while.