Cash or not

Posted: Thu, Jan 29 2009, 8:57 am Post subject: Cash or not

I get paid part of my salary in cash, and generally end up not depositing it and using the cash as needed, for shopping and other expenses.
Is that smart, or is it better to deposit it in the bank and withdraw as needed?

I'm just not sure that if I have cash, maybe I'll just end up spending more bec I feel rich. But at the same time, if I know I do my grocery shopping only from that money, I may end up being more frugal bec I know I'm not going to draw money.

Do you find its better for you financially to deposit cash that you get and withdraw as needed? Or to just keep lots of cash around the house and use that for expenses?

I also find when I take a certain amount of cash to the store, I'm less tempted to splurge on things, I know I have a certain amount and cant spend anymore, so I'll often end up putting something back that I don't really need if I realize I don't have enough money, than if I would use my debit card, because then "ehh, its just 10 more shekel than I was planning on spending. Who cares?".

I'm living in israel, so its just worth noting that there are fees every time I draw money, every time I makek a transaction with my debit card, etc... So if I draw as needed, I end up spending money on the withdrawals each time.

Platinum Member Joined: Sep 10 2006 Posts: 6566

I find it can be useful (although there are some reasons why I don't do this), so keep cash liquid and put it in envelopes to budget. ie. food envelope, gas envelope, clothes, babysitting, etc.

Then, I can only spend what I have there in the particular envelope.

This worked when I was single, and I don't now get paid in cash, so it's not really so practical for me, and I am pretty disciplined without it right now.
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Posted: Thu, Jan 29 2009, 9:08 am Post subject:

Posted: Thu, Jan 29 2009, 9:18 am Post subject: re: Cash or not

wow those sound like great ideas.
I hear u seraph I think I also go about spending in the same way...EXCEPT if I have some money left over from the grocery store,I try and think what else I can buy Laughing

the envelope is something I may try,I HATE giving the money to my dh to hold,bc he is like "dog w/a bone"he will hold it and hold it and hold it,no matter how much I beg and plead that I need it!!!

Posted: Thu, Jan 29 2009, 9:21 am Post subject:

Except you might need the bank deposit slips for Bituach Leumi and Mas Hachnasah...
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Posted: Thu, Jan 29 2009, 9:26 am Post subject: re: Cash or not

we do almost everything in cash. I do not use plastic unless there is no other option (online purchase)

it definitely helps us save and budget.

Seraph, I think you will be even more successful at spending your cash wisely and even saving some leftover if you make a household budget.

I will spend X on groceries, drug store, baby, etc... also, making specific shopping lists helps. then there's less chance of impulse buying.

Posted: Thu, Jan 29 2009, 9:29 am Post subject:

What do people who get their entire salary as direct deposit do? Do you then do everything with a debit card or do you go to the bank when your salary comes in and withdraw it?
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Posted: Thu, Jan 29 2009, 9:35 am Post subject:

Now that the spending is in check, I use the credit card for almost everything (hora'ot keva is all on the card; we didn't even have one until 2 months ago). I find now that the habits are under control, I don't spend more on the card than I would spend in cash.

Before we had the card, I would go once a week, or every 10 days, to the bank machine and withdraw a certain amount of cash. The amount would be based on the bills that had to be paid in cash that week, and my grocery budget. If I ran out, I was stuck.

Mrs. K, there's a happy medium. You're describing all (everything with a debit card) or nothing (withdraw the whole salary at once) scenario. Debit cards in Israel are very, very, very expensive to use. They are considered credit cards, and you pay through the nose for the fees. Especially now where you pay per transaction!

Posted: Thu, Jan 29 2009, 2:57 pm Post subject: re: Cash or not

Mrs. K, when we had all income as direct deposit we used to withdraw 2-4 weeks worth of cash from the bank and use that. the cc is always avail to me for unexpected expenses or if I run short.

I also tend to shop in bulk. 4-6 weeks of meat from the butcher. Month's worth of diapers/toiletries from Walmart, etc. I think this helps me stop the impulse buys of going weekly to the store. (I still do groceries weekly of course).

Its my crazy system, but it works.

Platinum Member Joined: Jan 01 2006 Posts: 48156

I like using my credit crd. That means I have a record of the spending and get points besides.

Moderator Joined: Dec 26 2005 Age: 33 Posts: 11430

CM, me too. I don't spend any more when I use a credit card than when I use cash. And at least I get points when using a credit card.

Also, if you don't use a credit card and you lose your receipt (and want to return items) you're usually out of luck because then there's no record of your purchase.

Senior Member Joined: May 11 2008 Posts: 103

I too find that if I spend on my credit card my spending is more controlled, as I can always the check an itimezed list online. Cash always seems to disappear!

Posted: Thu, Jan 29 2009, 4:45 pm Post subject: re: Cash or not

What you've all said about CCs is true. I know this is my own crazy mishegas at play, but if I know I only have $100 to last me the rest of the week, then I'm just super careful when spending.

With a cc its so hard for me to think about how much I've already spent that week. I just don't "feel" how much I've spent --- until I get the bill.

I also almost never go into stores just to browse, or to shopping malls, because when I do I just want to BUY BUY BUY!. Rather, I wait till I have a reason to shop like I need new clothes, and just go with a certain amount to spend.

But, I know its easier to save money than to earn it and we both work so hard already, so I really don't want to spend more than I really need to.

I know its a little crazy and prohibitive, but it works for us. We are B"H living within our means and even can save, B"H!