Comments on: Spend Cash, But Don’t Forget Opportunity Costs http://frugaldad.com/2009/08/10/spend-cash-opportunity-costs/ Promotional Codes, Coupons & Deals + Money Saving Insights Fri, 25 May 2012 07:48:33 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: DDFD at DivorcedDadFrugalDad.com http://frugaldad.com/2009/08/10/spend-cash-opportunity-costs/#comment-30037 DDFD at DivorcedDadFrugalDad.com Mon, 17 Aug 2009 16:35:21 +0000 http://frugaldad.com/?p=3388#comment-30037 Nice post! Forget the Benjamins . . . bust an Andrew and watch it evaporate! Magic . . . Nice post!

Forget the Benjamins . . . bust an Andrew and watch it evaporate! Magic . . .

]]> By: compton http://frugaldad.com/2009/08/10/spend-cash-opportunity-costs/#comment-29966 compton Sat, 15 Aug 2009 19:27:22 +0000 http://frugaldad.com/?p=3388#comment-29966 Whenever a shop accepts a credit card as payment for an item, 3% (in the UK) of the amount is paid to the credit card company. Because most items are sold at the same price if bought with cash, this means that by paying with cash, you are subsidising the benefits enjoyed by credit card users (mainly not having to pay for their purchases for up to 56 days). As I'm going to pay for those benefits irrespective of whether or not I use a credit card, it would seem that paying by card offers better value for money. I realise you are not avoiding credit cards for value for money reasons, but do you think this aspect should figure in your thinking at all? Whenever a shop accepts a credit card as payment for an item, 3% (in the UK) of the amount is paid to the credit card company.

Because most items are sold at the same price if bought with cash, this means that by paying with cash, you are subsidising the benefits enjoyed by credit card users (mainly not having to pay for their purchases for up to 56 days).

As I’m going to pay for those benefits irrespective of whether or not I use a credit card, it would seem that paying by card offers better value for money.

I realise you are not avoiding credit cards for value for money reasons, but do you think this aspect should figure in your thinking at all?

]]> By: Meaghan http://frugaldad.com/2009/08/10/spend-cash-opportunity-costs/#comment-29951 Meaghan Sat, 15 Aug 2009 14:09:41 +0000 http://frugaldad.com/?p=3388#comment-29951 Good points. Using cash over credit doesn't mean smart spending, but I do still think I make better overall decisions. Actually seeing the cash in my wallet dwindle as I spend it helps me to step back and think twice. To make truly wise decisions, however, you need to plan ahead and set budgets/limits, so you don't just view that $100 in you pocket as available money to spend on whatever you want. Good points. Using cash over credit doesn’t mean smart spending, but I do still think I make better overall decisions. Actually seeing the cash in my wallet dwindle as I spend it helps me to step back and think twice. To make truly wise decisions, however, you need to plan ahead and set budgets/limits, so you don’t just view that $100 in you pocket as available money to spend on whatever you want.

]]> By: Dan http://frugaldad.com/2009/08/10/spend-cash-opportunity-costs/#comment-29789 Dan Tue, 11 Aug 2009 12:43:34 +0000 http://frugaldad.com/?p=3388#comment-29789 Moving to an all cash basis sounds like a good idea for controlling spending. However how do you order things online (that can be cheaper than in a store) with only cash? Dan Moving to an all cash basis sounds like a good idea for controlling spending. However how do you order things online (that can be cheaper than in a store) with only cash?

Dan

]]> By: RB @ RichBy30RetireBy40 http://frugaldad.com/2009/08/10/spend-cash-opportunity-costs/#comment-29774 RB @ RichBy30RetireBy40 Tue, 11 Aug 2009 03:43:15 +0000 http://frugaldad.com/?p=3388#comment-29774 Interesting. I purposely move away from spending cash because 1) it's harder to track how much I spend, and 2) I feel uncomfortable carrying more than $100 in my wallet. I've seen and heard many friends get pickpocketed and mugged before. I use my credit card for EVERYTHING b/c 1) it gives me a 1% home rebate that pays off my mortgage, and 2) I can track everything on my card. Makes spending easier and more convenient. Perhaps another reason I use my CC is b/c I spend a lot every month. If I only spent $300/month, then sure, cash is fine. But if i'm spending $1,000-$1,800, then CC is the way to go. To each his own I guess! Rgds, RB Interesting. I purposely move away from spending cash because 1) it’s harder to track how much I spend, and 2) I feel uncomfortable carrying more than $100 in my wallet. I’ve seen and heard many friends get pickpocketed and mugged before.

I use my credit card for EVERYTHING b/c 1) it gives me a 1% home rebate that pays off my mortgage, and 2) I can track everything on my card. Makes spending easier and more convenient.

Perhaps another reason I use my CC is b/c I spend a lot every month. If I only spent $300/month, then sure, cash is fine. But if i’m spending $1,000-$1,800, then CC is the way to go.

To each his own I guess!

Rgds,

RB

]]> By: Generation Y Investor http://frugaldad.com/2009/08/10/spend-cash-opportunity-costs/#comment-29765 Generation Y Investor Mon, 10 Aug 2009 22:14:15 +0000 http://frugaldad.com/?p=3388#comment-29765 I 100% agree on switching to cash just because of the "transactional pain" factor. I'm in the process of transitioning my spending from 100% credit cards (paid off monthly) to cash. Right now I'm about 75% cash 25% cc. It's really amazing how much less you spend when dealing in cash! -Gen Y Investor I 100% agree on switching to cash just because of the “transactional pain” factor. I’m in the process of transitioning my spending from 100% credit cards (paid off monthly) to cash. Right now I’m about 75% cash 25% cc. It’s really amazing how much less you spend when dealing in cash!

-Gen Y Investor

]]> By: Kevin@OutOfYourRut http://frugaldad.com/2009/08/10/spend-cash-opportunity-costs/#comment-29755 Kevin@OutOfYourRut Mon, 10 Aug 2009 19:17:55 +0000 http://frugaldad.com/?p=3388#comment-29755 This part alone, "Shopping with cash causes transactional pain - that little twinge you feel when Uncle Benjamin leaves your wallet to be replaced by a few George Washingtons in change. That hurts."--is the basic point. When we spend what is clearly "our money" we'll naturally be more reluctant to spend it. That creates a natural budgeting mindset that's often absent with credit cards or even debit cards. It's the visual impression it makes, aka, one picture is worth a thousand words. This part alone, “Shopping with cash causes transactional pain – that little twinge you feel when Uncle Benjamin leaves your wallet to be replaced by a few George Washingtons in change. That hurts.”–is the basic point.

When we spend what is clearly “our money” we’ll naturally be more reluctant to spend it. That creates a natural budgeting mindset that’s often absent with credit cards or even debit cards. It’s the visual impression it makes, aka, one picture is worth a thousand words.

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