The Best Financial Advice I Ever Received

The best money-related advice I ever received was to use cash when making purchases. Dave Ramsey, the popular financial guru, shared this advice via his Financial Peace University course. When I originally heard this concept I was a little skeptical. You mean I have to go to a bank or find an ATM to buy things?!?

This seems like a really old-fashioned concept but I have found it to be really helpful in managing my expenses and keeping track of where my money goes. Money can slip through your fingers pretty easily without much thought. Morning coffee, going out for lunch, getting the car washed, and many other trivial purchases can add up before long. If you’re not careful you can spend $100 and not even remember where it went.

When you use cash to make purchases, you feel your money being spent. Literally, you feel it. You have to reach in your wallet to get the cash out. While you’re doing this you observe how many bills you have. Then you have to physically touch the cash and hand it to the cashier. Your wallet becomes thinner. That physical transfer is important for the purchasing experience. Your money was exchanged for a good or service, and now you’ll have to save up to get it back. I now have a tactile memory of where my money went.

This is in contrast to spending money online with card numbers automatically saved in the web browser. All you have to do is click once and the deal is done. Poof! Your money is spent and your item is being delivered. There is nothing inherently wrong with purchasing things electronically. I do it often because it is more convenient than making a trip to the store for an item that they may or may not have in stock. But for as many things as I can, I try to pay in cash. This helps me remember my purchases and feel the money leaving my wallet.

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