Why You Should Pay Cash
Why You Should Pay Cash is the fourteenth part in the series: The 15 Day Guide to Becoming a Fabulous Frugalist. We believe paying cash keeps you on the frugal path and can help you to create the kind of life you really want
We have absolutely no debt here at The Cents house, that’s right zero, nada, zilch! Not one of us out of 5 adults has any credit card, car or finance debt of any kind. I think that’s pretty amazing.
Having no debt and an emergency fund reduces stress and opens up a lot of opportunities that would otherwise be unavailable, like quitting my job to work from home.
A big factor in our lack of debt and having savings is that we only pay cash. We have a credit card for emergencies, which we never use and are thinking about getting rid of.
Here are some of the reasons you should only be paying cash.
If you don’t have it you can’t spend it. I draw out $100 a week in cash for our groceries. This is what we live on. Once that cash has gone we don’t spend anything more. If we need an item we either substitute for it or we go without.
Helps identify needs from wants
Our true needs are very few. Food, a roof over our heads, water and clothing to keep us warm is really all we need. When you are paying cash it helps you to recognise whether the purchase you are about to make is actually a necessity or not.
Helps you to stick to a budget
Although we don’t really have a true budget we do have an idea of what money we need to cover our basic costs each month. However if you are new to being frugal then using cash helps you stick to your budget. If you know you only have a certain amount of money to spend in each category then you will not be able to spend any more once it has run out.
Makes you wait for large purchases
When you are paying cash you have to wait and get used to saving for the large purchases in life. This gives you time to consider whether you actually really need this item or not. If you decide you do, you have got into a fantastic pattern of saving, which you can continue after you have paid cash for your item.
Forces you to consider your purchase
If you are used to living on credit then you are probably not used to stopping and considering each purchase you make. When you are paying cash you will need to . Is this purchase going to break the budget? Do you really need it? If you buy this item are you going to have to forgo something else? These are all questions you may need to get used to asking yourself.
Keeps you out of debt
This is a big one. If you are paying cash only you absolutely cannot get into debt! If there is no other reason for you to consider paying cash only this is the one you should do it for. Debt causes huge amounts of stress and keeps you tied to a job you may hate. Living a debt free life is not only possible it’s the most freeing thing you give yourself.
Allows you to follow your dream
With no debt you can begin to sock money away into an emergency fund and really give yourself choices in life. I was able to leave my job and begin working at home with Mr Cents becasue we have no debt, we have an emergency fund and we are frugal people.
This didn’t just happen over night, this has taken some perfecting over time to get to a stage where we are happy and comfortable with the way we live. We both sleep well at night knowing we are debt free and working towards the life that we truly want.