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My Journey to becoming a Nobel Woman – Day 39

February 25, 2010

Pay Cash

Scripture to Memorize:

She opens her arms to the poor

and extends her hands to the needy.

When it snows, she has not fear for her household;

for all of them are clothed in scarlet.

Proverbs 31:20-21

Passage to Read: Matthew 6:19-21 Today’s passage reminds us not to store up treasures here on earth where they can be destroyed or stolen, but to store up treasures in heaven.  It also tells us where our hearts are, there will be our treasures.

Guided Prayer:

Ask the Lord to forgive you the times you’ve stored up treasures here on earth instead of storing up treasures in heaven.  Admit that you have been foolish and ask for help to focus your attention on heavenly treasures.

Personal Observation:

As we are clearing out the rubble of our debt, it is important that we stay out of debt.  For centuries people worked and saved until they could pay cash for the desired items.  That is a practice we should now strive to copy.  By taking the time to work and save until we can afford something it gives us a gift — the opportunity to think about whether or not we really need the item in question.  Too often these days we act more like toddlers — I see, I want, therefore it is mine (or we think it needs to be ours) and the lure of the plastic is strong.  How many of you have clothes (or other items) in your home that you have never worn (used) but can’t bear to give up because of how much money you’ve invested in the item?  (I know I have lots of things that meet that qualification and my children have more than I care to admit.)

Now, I want you to think back on everything you have thrown, given or stowed away since we began this study.  How many of those items were purchased with credit cards?  How many of those same items would never have been purchased if you had to save up until you could afford it?

Do you realize that as of the end of 2008 the average credit card debt per household — regardless of whether they have a credit card or not — was $8,329 ? (Source: Nilson Report, April 2009)  Even if each household never put another dime on those credit cards (which we all know is unlikely), and all they did was pay the minimum monthly payment, it will take them 47 years to pay it back and cost $33,000!

Many of us are in the US are struggling to make ends meet and wondering how to adjust their budgets.  By cutting up your credit cards and using cash only a remarkable 30% decrease in household spending happens.  For some reason (maybe it’s seeing the money leave their hands), spending cash typically causing people to stop and think before they make a purchase.

The solution is to become a cash person in a cashless society.  From today on, either pay cash (this includes cash, check or debit card that directly deducts from your checking account) or don’t buy it.  When you run out of money, stop spending.  That’s your budget in a nutshell.  You don’t have to track where every penny goes — if you don’t have the cash, you don’t get it.

If you insist on using your credit cards, and desire to be debt free, your only option is to pay off the balance each and every month.  Research has found though that only 40% of people are self-disciplined enough to do so.   Be honest, are you in the 60% or the 40% group?  Another option, instead of paying it off monthly is to access your account online and pay it off weekly (or bi-weekly as you get paid).

Stop and think before you buy.  Ask yourself:

  • Is there any possible way I can live without this — at least until I can finish paying off all the stuff I’ve already accumulated?
  • Does this fall into the 80 percent category of things I’ll almost never use?

Practical Application:

  • Make all necessary arrangements to lead a cash lifestyle.  (This includes cutting up all but one credit card for emergencies.)
  • Schedule cash withdrawals.
  • Obtain a debit card to replace your credit card.
  • Carry your checkbook and picture ID.
  • Pay cash whenever possible, stop spending once the cash is gone.
  • If you decide to continue using your credit cards, make arrangements to pay them off weekly.

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