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Eco Habit: Paying in Cash

At the end of 2022, my husband and I sat down and discussed ways that we could spend less, save more, and get closer to our travel bucket list goals. With that, the first thing I did was to evaluate our spending habits, not just on essentials like utilities, but literally downloading all of our grocery store transactions from our bank, and averaging them per month. And while I knew it would be a higher number than anticipated? I didn't realize HOW high.

Why? Well like most folks, we pay with plastic, then pay ourselves back at the end of the month...usually. And the little non-essentials (ice cream and good Scotch, I'm lookin' at you) find their way in. Withdrawing cash? As I told my husband, "I either forget it or it burns a hole in my pocket," using that for years as an excuse to use the mileage card instead. But the fact that my income has gone from six figures to zero in the past year due to my retirement? I decided to reconsider that silliness.

Here's the deal: As Dave Ramsey shares, a Journal of Experimental Psychology: Applied study found that "it’s psychologically less painful when you use a credit card over cash because it feels like you’re spending “future” money, rather than present money," explaining that "There’s something about physically handing over your hard-earned cash that makes you think twice before you spend it. You’re more likely to stick to your budget and find ways to stretch your dollar—like shopping around and looking for sales."

Now, I wasn't sure that would happen to us, due the hole-burning belief I'd held for so many years, but I thought, why (minus our utilities that are auto-deducted from our checking) don't we at least try going straight cash?

And by straight cash, I mean literally making a budget based on my husband's paycheck, deducting those utilities (I looked at a year's worth of bills and averaged them to create estimates), and allocating a specified amount for food, with $40 apiece every two weeks for ourselves as 'fun money'. That fun money could be pooled together for us to go for a cappuccino or glass of wine, going to a movie, or other non-essentials. We also looked at the biweekly average for groceries - and cut it by 20%. I'd withdraw that from the ATM on payday to handle our grocery needs for the pay period, and the rest would get transferred over to savings. No ifs, ands or buts.

Guess what? It's worked brilliantly.

Yes, there was some getting used to, but just like Ramsey said, it immediately changed my mentality to a more conservative approach to spending. And while one might think that means we'd be down to rice & beans or ramen? It's not true at all. We are simply living within our means, eating what we have ON HAND rather than adding to the food 'inventory' we have in our kitchen. And beyond the financial gain, there have been other benefits as well:

  • Healthier habits. Because of this new way of spending, we eat less meat, which is not as painful as it might seem...and any push towards vegetarianism (even for us omnivores) is a good thing. Y'all, my husband is a butcher, but that doesn't mean we're eating meat every night! (In fact, since we left the farm, we've bought chicken maybe three times in the past year, because the stuff - even at the 'sustainable' grocer - doesn't taste even a fraction as good as the heirloom chooks we raised on pasture.) Our focus continues to be QUALITY over quantity, and I'd rather use some gorgeous organic mushrooms or locally-made organic tofu in a meal than sustainable meat that costs double - and isn't always as good as what comes from local farmers. An organically-fed, pasture-raised chook is now considered a special occasion food, just like a good piece of pork belly that we cure into bacon. In addition, we decided to cut out buying alcohol for the time being. Occasionally we'll splurge and go out to our local Italian joint and each get a glass of vino, but for the most part, we've cut it out. It's pure sugar that I don't need. And paying in cash keeps me mindful of keeping food habits in check. As Psychology Today explains, "Pain of payment can curb the impulsive responses, and thus reduce the purchase of such vice products. Since paying in cash feels more painful than paying by credit or debit cards, paying in cash can reduce the purchase of unhealthy food items.”

  • Increased Sustainability. Yes, there are even benefits to paying in cash that help the planet!! Most know that (or can easily see how) e-commerce is an environmental nightmare due to the packaging, fossil fuels in shipping, and general waste created in buying more than we'd ordinarily need, but there are other bonuses as well. As compared to PVC (yep, the stuff that is currently poisoning the land, water and air of East Palatine, Ohio) used for credit cards, Slate reports that "Dollar bills are made from recycled, low-quality waste fibers that would otherwise end up in a landfill." In addition, by reducing online shopping, there are no data centers or online transactions or unnecessary packaging coming into play as compared to paying in cash at a brick and mortar shop. As confirmed by Statista, " The undeniable ease of having products delivered has an environmental impact: in the biggest urban areas worldwide, carbon emissions due to e-commerce logistics are forecast to hit around 25 million CO2 metric tons by 2030."

Food for thought, no?

PS - Rather than leather or fossil-fuel plastics, my wallet pictured above is made from cork.


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