Back in April, we went off the cash plan.
In the two years prior to that, we paid down about $40,ooo in debt by completely forgoing credit cards. Â Â We went on a strict budget and all of our daily expenses–other than gas for the cars–was paid in cash. Â The only other exception was anything bought on the internet. Â Amazingly enough, Amazon doesn’t take cash. Â When that happened, the amount we spent online was taken out of the cash supply and set in a box until we could get it back in the bank.
No other exceptions.
In April, we decided that we had changed our relationship with money and could–judiciously–move back to credit card use, to take advantage of the rewards. Â Â We’d still use the same amount we had budgeted for groceries, Â clothes, and everything else. Â I set up an automatic payment for the budgeted amount, so we could use the card for our daily spending and the bank would automatically pay it off every month. Â What could go wrong?
We are not predisposed to be able to use credit cards well. Â It’s just not good for us. Â Credit cardsÂ just don’t feel like real money going out. Â Â When we were using cash for everything, we could see when money was running low, and we’d adjust our spending to stretch it out as needed. Â With plastic, it just became too easy to keep spending.
For the first couple of months, it was easy to overlook the problem. Â We paid my son’s vision therapy on the credit card, to get a discount on the therapy and cash in on the rewards program. Â Â That was around $4,000. Â Combined with the regular spending, it took us a couple of months to get it all paid off and current.
This month, we’ve managed to overshoot our monthly budget by $500. Â Â We’re only halfway through the month.
This weekend, we had a fairly unpleasant conversation about money. Â In the end, we decided to go back to cash-only. Â It works for us, in a way that credit cards don’t. Â Credit cards were a failed experiment. Â We’re going back to what works.
Have you ever had to switch from cash to credit cards and back? Â How did that work out?