Try a Crash ‘Cash’ Diet This Winter
Do you know who is on the twenty dollar bill? If you are like most Canadian you probably would have to guess. A quick survey of my officemates and a full 80% had no idea whose portrait graced the twenty dollar bill. (For the record it is the Queen)
Managing money in our paperless, wireless and cashless society is like trying to bottle fog –no matter how hard you try you cannot seem to get a grip on it. It raises an important question: How do you manage money if you never actually see it?
Cash has become all but absent from most daily transactions. A Vanier Study indicated the retail use of credit card transactions has increased 60% from 2002 to 2007 alone! The same study indicated 76% of the value of all retail transactions, excluding autos, were put on a plastic.
It is no surprise people are quick to flash plastic when paying. Many offer rewards, travel points and purchase protection. Credit cards have certainly made shopping simpler and safer.
What is the catch?
This reliance on plastic instead of paper does have a cost. According to Dunn and Bradstreet Americans spend 12-18% more on credit compared to using cash. The reality is it is difficult to manage money when we never actually see it.
The problem is when consumers use credit cards they tend to spend more and run the risk of going into debt. It is difficult to spend more than you make if you are using cash. With credit however, you can pile on debt gradually until it becomes unmanageable. In fact, debt has increased 6 times faster than income since 1990.
What is the solution?
A simple way to get a handle on your money is to go on a temporary, “Crash Cash Diet.” Six weeks will usually work and allow you to get in touch with your money again.
There is a very real sense of loss when you hand someone a twenty dollar bill and get back a meagre handful of coins. You will also notice your cash stuffed purse or wallet begin to shrink as the week progresses. This alone is enough to jostle most people into paying more attention to their spending.
I would not suggest ditching your credit card completely, credit is too important and besides I like the points. However, a temporary hiatus could be good for your relationship with your money.
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Posted on November 23, 2009
In: Personal Finance
Have you ever considered adding more videos to your blog posts to keep the readers more entertained? I mean I just read through the entire article of yours and it was quite good but since I’m more of a visual learner.
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Hey we was just viewing your page on my iPhone and I was wondering how well it will work on the new ipad thats coming out. Fleeting thought…. Anyway thanks!
Thanks for an idea, you sparked at thought from a perspective I hadn’t considerd yet. Now lets see if I can do something with it.
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I do have record some videos.:)
Why LIfe insurance on your mortgage sucks:
Why Life Insurance on Your Mortgage Sucks
The funny business of banks:
I agree. I too am a visual learner.
I believe it works on the IPAD. I will test it tonight.
Thx!
Hi,
I am working on the RSS feed. Thanks for the feedback.
