Paying With Cash

"Mom, why does everything cost money?!?!", Rylee asked after I said "No. That cost's money." for the sixth time in one day.  Great question, Rylee. Great question! 

Until 10 years ago, I really didn't know much about money.  It wasn't really something that we discussed growing up, I just knew I needed money to buy things.  Or did I??  When I was 18, I got this very pretty credit card; it was a great accessory in my wallet!  It was only for emergencies.....if you count a new desktop computer, 5 pair of $100 jeans, and several concert tickets emergencies.  Oh, and dinner out every other night and groceries and gas.  Oh, can't forget the cell phones and new bed.  But don't worry...I would be getting a real job after college and could pay it all off then. 

I did have a good job after college.  I actually made more money than a lot of my friends.  But I might as well have been jobless, because I tried to live above my means.  I had to have a fancy apartment, new furniture, décor, etc.  I had a gym membership (at least I actually used it), even though my apartment complex had a "free" gym, I shopped and ate out a lot.  Having a "real job" kind of went to my head and I wasn't properly prepared for life in the real world.  I ended up with $7,000 on that pretty credit card!  It was scary to be honest.  Especially because I also had a car loan that still had 3 years left on it and an enormous college debt to start paying.  At least I lived in a nice apartment with brand new furniture, right?!?!?  Ugh!  To make matters worse, I decided to switch jobs and took one that paid less than what I was making. 

It was about this same time that I met James, who lived in a super modest (okay, it was a dump) basement apartment.  He made much more money than I did and didn't have debt. Seeing that someone with the means to live the way I did, but choosing not to, was eye-opening!  He talked me into cutting up my credit card.  I got a 2nd job and eventually got it paid off.  Somewhere between cutting up my card and paying it off, I was gifted the book "The Millionaire Next Door: The Surprising Secrets of America's Wealthy" and it may be one of the most influential books I've read.  Thank you SO MUCH to the person who gave it to me!!!  If you haven't read this one, I highly recommend it.  It helped me understand why a person does NOT want to "keep up with the Jones'".  I have actually read it several times!  I plan to pass it along to my children.

Fast forward to today....well several months ago...  my spending was getting a little out of control.  When you have kids it is so easy to buy them all kinds of things they probably don't need.  It wasn't just the kids though...I got on a kick for a little bit to redecorate my whole house.  Anyway, I realized I was doing a little too much unnecessary spending and wanted to set a better example for my kids, so they don't go down a road of debt like I did.  I'm a big fan of Dave Ramsey, who's doesn't believe in debt and encourages America to pay for everything with cash, and have read a couple of his books....twice!  I'm trying to put some of his suggestions from his book "Smart Money, Smart Kids" into place.  This is another "must read".  I talk about money with Rylee a lot!  Daily!  When she asks for something that costs money, my answer is always "No. That cost's money."  And then we discuss that we have to work hard for our money and need to save it for important things....and no, McDonald's isn't important today.  Her sweet little heart will offer me money from her piggy bank not only to buy something for her, but also to buy something for myself :)  I think she is slowly catching on.  I asked her if she wants to go to Reiman Gardens this week and she asked if it costs money.  When I told her it does, she said, "Well you can go if you want, but I'm not going to because I will have to do a lot of chores to have enough money."  :)  Side note: when I pay her for working, she puts some of it in her brother's piggy bank because she feels bad that he didn't get any money :)

A few months ago I sat down and created a budget. This wasn't my first time.  In fact, I have put together a budget many times in the past 7ish years, but I never stuck to it.  I tried Dave Ramsey's envelope system before I even knew it existed.  In theory, it is a fantastic money management tool, but I just found it to be too much work to keep track of.  This time though, I think I have finally found something that works for me.  I'm on the 3rd month with it.  Basically, I figure how much money I have for "spending" after my few bills and savings are considered (don't forget to pay yourself -- savings!!), and I take that amount out in cash at the beginning of the month.  Once it's gone, I'm done spending for the month.  I use cash for everything except gas, and the only reason I don't use it for that is because I would have to take my kids out of the car to go inside and pay.  If I buy something online, I still take that amount of cash out of my wallet and put it in an envelope for the next month.

I read that using cash makes it harder to spend money because we feel an emotional attachment to the money we can physically hold in our hands.  I wanted to put this theory to the test, and I call tell you it is absolutely true for me!!  When I get down to the last $20 in my wallet I get very attached to that piece of paper.  Even though I've given myself permission to spend it buy placing it in my wallet at the beginning of the month, it is just very hard to watch the end of my money get spent.  Or when I spend a large amount right away at the beginning of the month, I get so nervous that I won't make it through the month and I'm very mindful of my spending for awhile.  This never happened when I paid for everything with plastic, because I couldn't actually see and feel the loss of my money.  Even though I always paid my card off in full at the end of the month (and had quite a bit of rewards cash to put towards the bill), the total of that bill every month was several hundred dollars more than what I am spending now.  I'm telling you, cash is the way to go! 

The other biggest reason I wanted to try using cash was so that my kids can see the money transactions taking place.  Today I was reminded why this is so important.  We were at the mall (I was actually returning clothes, not spending money!) and Ry asked if we could get pretzels.  I gave my usual "no, it costs money" response and I will never forget her reply.... "It does?!?!  But I never see you give her any money!!"  Ah-ha!  She does pay attention and does understand.  She has a little cash register with play money and a play credit card.  I hate that it comes with a card. When I'm the shopper I always tell her I will pay with cash because credit cards aren't real money and can't really buy anything. 

Money has a life of its own.  It can be good and it can be really bad, in so many ways.  I keep reading these shocking financial statistics, such as, only 1 in 4 American's has a savings account.  That just blows my mind.  I know it's my responsibility to make sure my kids grow up to be good money managers so while they are young little sponges, I'm trying to do what I can. 

If you need/want to watch your spending a little closer, I challenge you to try using only cash and see if you can make it last the entire month.  You might be surprised how it makes you feel to hand over your money for an item you know you don't NEED. 

If you want to read some really inspiring financial stories, these are my 3 favorite finance books to date:
Total Money Makeover by Dave Ramsey (Trust me, this book is insightful and inspiring even if you
     don't have debt)
Smart Money, Smart Kids by Dave Ramsey
The Millionaire Next Door by Thomas Stanley

Swapping

If you have been following my blog for awhile now, you know I have been on a quest to get rid of all the unused excess in my house.  Each time I think I'm done, I start over a couple months later.  It's definitely not an overnight process to rid a 4 person household of everything unnecessary.  I've probably made 25 trips to Goodwill in the past 2 years, had a garage sale this past spring, and am planning another at the end of the week.  I am about 90% satisfied that we now only own things we actually use and/or enjoy.  If we (mostly me) can just keep from bringing too much into the house that is unnecessary.  My husband said to me this weekend, "Things are for utility. If it isn't something that will be used or enjoyed, it shouldn't be purchased."  That isn't rocket science, but I get so caught up in eye-catching items.  I'm a work in progress, but I think I'm finally getting to that internal point where I just don't want to spend money on things that I know I don't really need.  Plus, I'm learning that 5 minutes after I leave a store without the item, I have already forgotten it even existed.

Previously, I was never able to utilize the swap sites on Facebook because of where we lived.  I didn't want strangers to drive out to our house, but I also didn't think it made any sense to spend gas money to meet them somewhere.  Thus, everything went to Goodwill for ease. 

Now that we live in town, I have been taking advantage of the swap site.  This particular site is so crowded that the admin stopped letting anyone else into it.  I have sold about a dozen items so far and have been amazed at how easy the process is.  I'm only selling things that I can get at least $5 for, because I don't think it's worth my time for anything less. 

My favorite thing about the swap sites though, is knowing that someone else is going to use an item that has just been sitting around in my house, unused.  I sold a very nice Land's End rain coat last week.  I bought it 5-7 years ago.  It was pricey, but very well made.  Sadly, I can only recall wearing it one time.  I had been debating getting rid of it for about the past 2 years.  The first time that I decided to go ahead and get rid of it, my husband strongly encouraged me to keep it because it was so nice and was purposeful.  But, another year went by and I never wore it.  When I go out in the rain I wear a different jacket.  It's not a rain coat and doesn't really function like one at all, but it's just the one I prefer to wear.  This time I was honest with myself that I am never going to wear the rain coat and put it on the swap site.  When the lady came to buy it, I told her that I was a little sad to get rid of such a nice coat, but that I just wasn't wearing it.  When she told me, "Well, I will be wearing it a lot!  I have 4 kids who all play soccer and I sat through too many rainy games this year and got too wet," the guilt of selling it left me completely and I was overjoyed that she would be getting use out of it.

Today, I sold the lens that came with my camera.  I just don't use it, as I own 2 nicer lenses that I prefer shooting with.  I wasn't sure anyone would want it, because I figured anyone with that camera would already own the lens, since it comes with the camera.  However, when I met the gal who bought it, she told me that her lens just broke and was going to cost her 4x more to fix than the price I had it listed for.  She was extremely happy to be able to save so much money and not have to wait for her lens to get fixed.  Again, I felt that I made the right choice to sell it. 

In a world where so many prefer brand new, it's refreshing to see so many people reusing and repurposing items that others no longer want.  As a buyer, you can score a great deal.  As a seller, you get a great sense of joy knowing someone is so excited to have the item you weren't really using anyway. 

If you have something you know you should probably part with, but just feel too guilty getting rid of, try your local Facebook swap site and see how good it makes you feel to watch someone else's excitement over the item...it is working for me :)

You Get What You Pay For

I would call myself frugal at times...a lot of times, to be honest.  There are plenty of things I don't want to spend money on that others may splurge on.  I have found things I can live without so as not to have to spend money on them, and some things that I can live with lesser quality, so as not to spend as much money on them. 

However, being frugal has also backfired on me many times.  I can't even begin to tell you how many times I've bought the cheapest product/service/etc. only to end up being disappointed and then going back and spending the more expensive amount I should have in the first place.  I love a good deal, but sometimes the saying "You get what you pay for" is just too true. 

Here are some things I have found definitely worth spending more money on:

Pillows. 
Do you know how many pillows I've gotten from Target and Wal-Mart??  A LOT!  But guess what....I always go back the next year to replace the pillows because they have gone flat.  When we got married 6 years ago, we got daring and registered for expensive department store pillows.  Guess what?!?!  We are still using them today!!  I will definitely be spending the extra coin on my next pillows.

Towels.
Same story. My expensive ones stay softer and fluffier so much longer!!  And who doesn't love a soft fluffy towel to dry off with?!?!

Shoes.
This one wasn't as critical for me until after my accident, that left me lopsided.  I'm slightly shorter on one side than the other from my hip to my feet, so I limp occasionally.  I have found that having comfortable shoes helps keep my hip from bothering me.  Not being a "shoe person", I don't really own that many and don't feel as guilty for spending a pretty penny on them.  Plus, I have found that better quality (thus more expensive) shoes hold up longer.

Hair.
I tried out the cheapest route possible once -- a beauty school.  I only went because a friend's sister was going there and I trusted her.  She did a great job.  However, after she graduated I went to someone else there and got the worst hair cut ever!!!  Like, I went straight to another salon (one of the most expensive ones I could find) to get it fixed.  Lesson learned.  I've heard too many other horror stories about the cheap hair places to take another chance on one.  I don't go often, so I'm all for paying more for a great stylist!

On the same topic, I have also found that more expensive hair products really do work better for my hair.  I had read once that all shampoos and conditioners have about the same ingredients.  However, I haven't found them all to work the same on my hair.  Unfortunately, the more expensive ones are pulling more weight in this category.  (If you're wondering, I am still using and loving the bar shampoo and conditioner!)

Food.
Restaurant (the sit down and be waited on kind) food is better than fast food.  Most brand name foods are better than generic...depending what it is.  And REAL food (produce, meat, etc) is so much better for us than the boxed and canned, processed, "not so real" food that costs much less.  I am by no means the worlds healthiest eater, but I do try to be conscious as much as possible about what I'm eating.  Yes, it can be a little more expensive (not always), but, to me it's definitely worth it to feel better.  Fortunately, we have about 40-60 lbs of free venison each year! 

Jewelry.
Duh.  Diamonds > plastic.  Am I right, or am I right?? ;)

Furniture and Décor.
Okay.  I have to say that I am always drawn to the cheaper furniture and décor items.  My husband though, is always coaching me to stop buying cheap stuff that will break or get scratched easily.  I will say that he is right....better quality (which always equals more expensive) does appear to be holding up better AND keeping my interest longer than cheaper things I buy and get rid of a short year later.  I AM glad though that I bought a cheap rug for our rental house....been here 2 months and kiddos already spilled grape juice on it! 

Knives.
Credit goes to my husband for this one too.  We (he) registered for a set of good knives when we got married and soon after I started using them, I had no use for the cheap set we had.  I figured a knife was a knife....wrong!

Okay, that's all I got for now.  I'm sure I will think of a million other items after I post this.  I know my husband has many things he likes in the more expensive version too.  Don't we all??

What are some things you prefer to spend more money on??