Can Man Live on Cash Alone?

By Katelyn Hayes   

Though it seems hard to believe, there was a time before plastic ruled the world. Credit cards only gained widespread popularity in the second half of the 20th century. Before then, if you needed to buy something, you had to save up, carry a checkbook or plan ahead to pick up cash from the bank.

Nowadays, few people even interact with bank tellers. Between credit cards, debit cards, wire transfers, automatic bill-paying and online banking, you can live virtually cash-free. But it's easy to forget how much you're spending when you never see a dime exchange hands. The reality of how much you've spent only sets in when your credit card bills and bank statements arrive at the end of the month. This system allows too many to live beyond their means, trapped in a game of financial catch-up.

Cash costs less

Everyone is looking for ways to weather the swirling financial storm. We all have to rethink the way we balance our budgets, starting with buying only what we can afford. The first step is to remember that money is a tangible commodity, not just a bunch of numbers and decimal points floating around, sliding in and out of bank accounts.

Using a credit card for everything from the morning coffee to paying off another credit card bill costs you more money in the long run than paying by cash or check.

Cut the credit card cord!

Try living for one week on a cash-only diet so you can literally see exactly how much you spend. At the end of the week, compare what you spent to what you would have spent during an average plastic-fueled week, and see how your spending habits differ — and be sure to include the interest you would have incurred into your final calculations.

Here's the hard part: Stop treating your debit card like a credit card. While it's true you won't face any interest fees, it still lets you spend without seeing the physical exchange of money. The point of this exercise is to see if living in a cash-fueled world will help you spend less and ward off increasing debt.