Cash Myths

The Seven Cash Myths We Avoided to Save $27,000

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The Seven Cash Myths

The day we started using cash is the same day we got a raise. Cash is way underused in our hyper-consumer society and it gets a bad rap. Let’s first debunk a few of the cash myths that are out there that are just plain garbage.

Myth #1

If I have cash, I will spend more

Answer: They banks want you to believe that, but according to science – it’s simply not true. Did you know the credit/banking industry spends more money researching YOU than any other industry on the planet? In fact, Carnegie Mellon University did a study that actually proved the PAIN RECEPTORS in the brain are activated when using cash. When you use plastic, those same pain receptors aren’t firing, therefore you aren’t feeling money. Don’t believe this is true, ask yourself this – What feels different: Paying at the gas pump with your credit/debit card or walking in and slappin’ down a Benjamin on Pump #7? Cash causes you to feel pain (No pain, no gain)

Myth #2

If I have cash, I will get robbed, mugged, beaten, attacked, and then jumped

Answer: (They don’t know you have cash in there). Why? BECAUSE NO ONE IS USING CASH ANYMORE! A thief has no idea you are using cash because they can’t see inside your purse. You could have $1 or $5,000 inside, however it still looks the same from the outside. I paid cash for my Piece of Crap and was walking around with $8k in cash and no one cared – because no one knew. If you truly believe this, take karate and carry mace. Judo works well too.

Myth #3

I will get a better deal using my credit card because of the sign up offer

Answer: You can also get a deal using cash. Whenever we are at a department store and we get to the cash register, we are offered a credit card to save 10%. My bill at Target was $31.57 and I could have saved a whopping $3.15! Whoo-Hoo, I am rich! However, I think Target also saw the study from Carnegie Mellon University and they know “I’ll be bock”. Cash also offers a discount because of the reverse effect of those same pain receptors. They cause excitement! We went to buy our living room furniture at one of those mega-furniture-stores you see on television. We actually had the NERVE to pull out $2,000 CASH MONEY and fan our face with it while asking for a better deal. We helped them knock off $300 from the total price using cash! Boom goes the dynamite!

Myth #4

Cash is for drug dealers and I don’t want people to think I am the next Pablo Escobar

Answer:  You can still use cash and avoid selling drugs. This is ludacris and I hear it often. Seriously. Cash is not the gateway drug into the sale and trafficking of drugs. I didn’t even want to include this myth, but I have heard it way too often. Moving on…

Myth #5

If I have cash, I will lose it

Answer: Why? If you have cash, you won’t lose it because you will actually FEEL it in your wallet. Remember those pain receptors in the brain? Do you think they are going to let you lose that precious cash? No way! Just because something is of value, doesn’t mean you are going to lose it. How often do you lose your $20k car? Do you often misplace your $6k wedding ring? What about your $600 iPhone?

Myth #6

Cash is slowly being phased out and everything will soon be going to credit/debit cards, bitcoin, apple pay, and the next greatest technology to help you NOT feel money.

Answer: “Jerry, show me the money!” Cash isn’t going anywhere. I have heard this before and it is completely absurd. Let’s just think about how this is going to happen. Are we going to wake up one day and just tell everyone cash is no longer going to be accepted? What are we going to do with all the cash out there in society? Just consider it obsolete and move on? People will eventually get over their cash becoming worthless. Sure. Absolutely ridiculous.

Myth #7

Cash is too restrictive. If I only have so much cash in my wallet and the bill comes out to be more than I have, I would rather have my credit card on me.

Answer: That’s the point! However, you are looking at it from the wrong direction. Try this: I don’t have the money to pay the bill so I need my credit card (so I can slowly go into debt). This plan would be the oppositte of awesome. Use cash.

Podcast EP003: The 7 Cash Myths We Aoided to Save $27k

When we decided to start changing our lives with money, we stopped believing many of these myths and went to cash. It started out as a little experiment to see if we would notice an improvement with our finances using only cash. We never went back because the results were huge. We tell everyone the biggest raise we have ever received was the day we got on a budget and started using cash. We still use our one debit card at the gas pump because when it is 110 degrees in Arizona, and the wifey has to unbuckle two kids from their car seats to take inside to use cash – she comes home pissed off. Cash is king. Cash will give you a raise. Cash will help you win. Try it – what do you have to lose?

They Tried It!

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Posted by Amanda Marden Walker on Monday, June 8, 2015


What to do and How to do it

On the 1st and the 15th of each month, we go to our little credit union and pull out the cash we need for those two weeks. We know how much cash we need to pull out because we did our budget BEFORE the month ever began. We take our cash home and stuff it into our envelopes. We go to the store and use the cash out of our envelopes. When the envelopes don’t have any more money in them, we are done spending. Genius!

We estimate we started saving about $500 per month when we went to cash! We started using cash back in February 2011, therefore we have saved around $27,000 using cash! Wow, that is crazy to see that number staring back at me on the screen. At this pace, we will have saved $60k in 10 years and $120k in 20 years. If you think saving $3.15 at the register by signing up for their credit card is a better option for you, by all means it is your choice. Choose wisely.

Be good to yourself, your friends, your love, and BE GOOD TO YOUR MONEY!

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18 replies
  1. J. Money
    J. Money says:

    Big believer in cash here too, though I’m too lazy to pay everything with it and still pay all my bills/mortgages/etc via e-cash 🙂 But every month I do take out $100-$200 in cash which is allowed to be spent on anything I desire – no questions asked. It’s my “keep sane” buffer so every penny isn’t tracked. And oddly enough it takes me quite a while to blow through it even though it’s blow money! I often skip months at the ATM just because I typically have some left over.

    • Peach
      Peach says:

      J. Money, we don’t send cash to the mortgage company, utilities, or insurance company either. Can you even still do that? We have our bills on Auto-Pay, but we use CASH for everything else. Food, clothes, entertainment, and everything you normally would swipe a card for. But, if there is anyone walking into the bank and giving cash to the teller for their mortgage payment – then you are epic and my hats off to you!

  2. Jules
    Jules says:

    Ha — this is exactly what I do every paycheck (bi-weekly) — withdraw a certain dollar amount and that is my money for gas, groceries, haircuts, fun, etc. When the money’s gone, I have to suck it up. Unfortunately, I have not tracked what I saved using this system. Good on you for doing that!

    I have told other people about my system, and I think they think I’m nuts. Oh well.

    • Peach
      Peach says:

      If people think you are nuts, then congratulations – YOU’RE NOT NORMAL. Normal is broke, living paycheck-to-paycheck, and driving a car with a $488 car payment over 82 months! Your system is awesome and it will soon become cool (I hope) 🙂

  3. Kurt
    Kurt says:

    I use cash exclusively except when a credit/debit card is extremely convenient or required. I’ve never bought into the theory that people who use cash spend more than people who use plastic or other tech alternatives. In fact, my theory is it’s just to opposite! If I want to spend less than $100 this week, in a glance I can see how much of my bankroll is left. With other alternatives, you have to do a little work to learn how much you’ve been spending.

    As far as getting mugged, smartphones are more attractive mugger-bait than cash these days. Bad guys know that most people don’t carry much cash anymore. Get a money belt if you’re worried! 🙂

    • Peach
      Peach says:

      Hey Kurt!
      You’re right on the money! You will actually spend less with cash versus plastic because it causes you to feel money. Example: When you’re at the gas pump and pay with a card, you drive off and don’t even realize how much you have spent. When you walk in and give the person behind the counter a $100 Benny for Pump #7 – you know EXACTLY how much it costs. Thanks for reading and thanks for the post!

  4. Kathy
    Kathy says:

    I agree with you on everything except #6. I just read an article that one of the big banks (Chase?) has declared that they will no longer accept cash payments for mortgages serviced by that bank and will not let customers keep cash in their safe deposit boxes. I do think that someday the government will simply stop printing money and put everyone on an electronic system. People who have more cash cannot be controlled as easily and the best way to control them is to control their money. Plus the electronic monetary system would more easily allow the government to simply seize assets in a giant financial meltdown such as what recently happened in Cyprus. I’m sure there are people who would argue that our government would never do that but my conspiracy theory addled brain thinks otherwise.

    • Peach
      Peach says:

      Kathy – thank you and I actually like that you disagree with me . It makes good conversation. However, I still don’t think we would ever leave a cash from hand to hand culture. Trading something that is tangible like paper money is rooted deep within our entire world. While technology is convenient, cash is full proof and it has value because we give it value – not the banks or govt. I can see why banks would want to go away from cash – because it’s cost effective to have it all electronic. In my opinion, cash will always be a part of life. Thanks for the comment!

  5. JP
    JP says:

    We used to use cash for everything. Now my wife and I use cash back credit cards (1.5%) for almost every purchase, and pay the balance off each month.

    I agree we might spend less if we had to hand over cash for every purchase.

    The cards are extremely convenient, and we typically are good at living within our means.

    The result is a nice check every year that we use for something fun. I see that as free money if we can live within the requirements of paying our accumulated bills each month.


    • Peach
      Peach says:

      Hi JP!

      Here is the deal – the average household that uses a credit card carries a $15k balance as of May 2015. I don’t think anyone signs up for a credit card and thinks to themselves “I can’t wait to carry a $15k credit card balance at 22%”, however the statistics show they do. There are people like yourself who do pay them off each month and take advantage of the cash back. If this is you, then keep doing what you’re doing – free money is free money right? Just be aware the banks are NOT in the business of losing money. Not only do they know they will still make a profit by giving JP a check each year as far as cash back, they also know you will SPEND more with plastic versus cash. Why? Because plastic is CONVENIENT 🙂

  6. Jason B
    Jason B says:

    I try to use cash as much as possible. I chuckled reading a few of these myths. Myth #2 is always interesting to me. Like you stated above nobody will know if you have cash unless you flaunt it. It is very unlikely that you will get robbed or beaten up for it.

    • Peach
      Peach says:

      Jason – if I can talk about $$ and make you chuckle, then today is a good day! Money is supposed to be FUN since it touches every aspect of our lives. I will sometimes have $2k cash in my pocket of my gym shorts (zipper pocket of course) and I laugh thinking how no one would ever guess some sloppy/sweaty person would dare carry money around like that. Well I do, I’m sure I’m not the only one, and I am sure robbers (ha ha that sounds so ridiculous) would rather jump a person carrying a $2k purse than the dude with the gym shorts pocket as a purse (man purse of course)

  7. Brenda
    Brenda says:

    I feel like I’m the exact opposite. Cash is money already spent for me. It is money not in my bank account, and therefore not visible when I check online or when I view net worth on Personal Capital or Mint or whatever you use to calculate. I have no guilt using cash (for food delivery especially) because I don’t have to account for it later. I have designated budgets for categories and ATM withdrawals are just that — spent money in ‘unplanned’. Now granted, I pay off my CC debts and use the bonuses like Chase’s 3x points for travel, and track all money flow with projections monthly and yearly. Once you are ‘debt-free’ and treat CC like real money, it is crazy to waste the opportunity costs of a 30 day grace to pay. It is a lot like letting the IRS take your taxes from withholding and giving you a refund at the end. They have ~15 months to earn at least a 3% return (conservatively) that you lost if you file around March with your January earnings the year prior. They earn (and keep) the compound interest that you could have earned. Cash is great while you build self-control. But once you have it, it serves little if any real world advantage.

    • Peach
      Peach says:

      Hi Brenda,

      I am glad you disagree with me! For people like yourself, keep doing what is working for you. I have a friend that is completely debt free and also a multi-millionaire. His family uses credit cards because like you – they have self control. However, what about the 70% of Americans living paycheck to paycheck? Or the 2015 American Credit Card Balance of $16,140 because those people can’t pay it off each month like yourself (Nerd Wallet)? Also, you spend more when using plastic. Remember, this isn’t my opinion, it’s backed by scientific research done by MIT by using MRI scans on the brain – the pain receptors aren’t activated in the brain if you’re not using cash. Lastly, I am going to disagree with you when you say it serves little real world advantage. I am living proof that we have saved thousands of dollars using cash. Example: Last week we negotiated a price to have our pool refinished. When trying to come to an agreement with the numbers, I asked if there was a “cash discount”. The real world advantage caused the price to drop $1,200. Cash really is the preferred method of payment.


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