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The thing that really worked for me was I only ever buy in person with cash. I almost never use my debit card in person. This simple thing changed my relationsh

The thing that really worked for me was I only ever buy in person with cash. I almost never use my debit card in person. This simple thing changed my relationship with what I buy. Obviously my mortgage and other monthly payments are direct debit but unless the purchase is several hundred Euros or more I will pay in cash. I always have €200 in cash on me which is enough to cover me at least a week. Then whatever I have left over at the end of the week I roll over. So if I have €60 left I take out 140 and transfer the difference into a savings account. I have saved a shocking amount doing this. It may seem strange but budgeting myself 800 for the month and only using cash has really helped me appreciate how much the money is worth to me. The short of it is on pay day each month I transfer 800 to my "cash account", I transfer the exact amount I need to cover my bills into my "bills" account (I also have a "buffer" of 100 in this account as a 'just in case its more than I calculated'). Everything else goes into savings. Everything. Obviously some things fall outside the 800 cash allocation for example I bought a new coat a few weeks ago which was €230. I tried it on in store but bought it online as there was a discount I couldn't use in store annoyingly. However I have a separate budget allocation for key clothing items like coats and boots which I generally replace every other year. However I don't bother with multiple savings accounts anymore. I never found I benefited from the added complexity. If in a month or two I ruin my coat and have to buy a new one unexpectedly I will just take 230 from my savings rather than juggle things around. I should say though that all of our expenses come from a single salary. Every month my wifes automatically goes into savings. Generally we never need to touch it. This is great for many obvious reasons but it also helps us (well me!) feel less guilty when I suggest we buy something we don't really need such as an OLED TV we got a few months ago.

Hackbraten 7y ago
How do you feel paying in cash helps compared to cards? I honestly don’t get it. For me, withdrawing and paying cash simply adds unnecessary complexity, and on top of that, it destroys any paper trail you may need for tracking your individual budgets. How come people (mostly in Germany, from my experience) are so obsessed with cash?
- sshine 7y ago
  Having recently received private financial advisory, my advisor recommended that I do exactly this: Withdraw cash weekly, use only that cash to pay for food. Supposedly, it will make you more aware of how your spending affects your balance. Swiping a card "feels free".
  - lostlogin 7y ago
    > Swiping a card "feels free" Could this relate to age or how one grew up? It doesn’t seem like one abstraction is really all that different from the other.
    - newnewpdro 7y ago
      Cash is physical, it's tangible, exists in your hand/wallet, occupies space, carries weight in the real world. It's experientially very different to spend, and for me at least, carries substantially greater negative feedback as my wad diminishes in transactions. Then having to replenish my stash, visiting an ATM or asking for cash back, carries a distinct bite. Those things are largely absent when using cards or other electronic payments like phones. Though you can structure electronic payments such that it at least draws on a very small account requiring explicit replenishing of some inconvenience, to retain some of the bite as weekly or monthly funds become exhausted.
- smileysteve 7y ago
  The idea is that all of that unnecessary complexity helps make the expenses more tangible. So you're paying with 20s instead of a swipe. This isn't as much of a problem for the thrifty whom feel similar anxiety in using a card. Most likely people who are actively keeping a mental track of where their balance is after every purchase - or using a ledger.
- astura 7y ago
  The idea is you spend less if getting your money is unnecessarily complicated. Plus since you can physically see your money going away it "hurts" more so you'll be more likely to spend less. This doesn't "work" for everyone. OTOH what really helped a family member of mine understand how much he was spending was getting a credit card. He was on all cash for years and then moved to all debit. Never had any idea what he was spending because if he needed cash he'd just hit up the ATM or when he was using debit just swipe. He always spent less than he had/made but he wasn't paying attention to the amount on a larger scale. Once he got a credit card (at my suggestion) and started putting everyday purchases on it the bill would come at the end of the month. When he say down to pay it off he had to confront the entirety of the money he spent that month. He'd say "what the hell did I spend ${amount} on?" and he'd comb through the transactions and get a much better idea of his spending habits and was able to reduce the purchases that weren't providing him much value.
newscracker 7y ago
Tangentially related: ever since I read “In Praise of Cash” [1], I started doing as many transactions as possible in cash. I make sure I carry enough change in different denominations so that I can pay almost any amount without having to worry about inconveniencing the receiver for change. It may seem like a hassle to others, but I’m ok with this. [1]: https://aeon.co/essays/if-plastic-replaces-cash-much-that-is-good-will-be-lost https://aeon.co/essays/if-plastic-replaces-cash-much-that-is...
- late2part 7y ago
  This is somewhat similar to what You Need a Budget ("YNAB") does. Whereas you are prepared for any transaction and deliberately process it manually; YNAB forces the user to manually document and enter the transaction, recreating a similar process as you do physically. This creates a tangible transaction in the human's brain - making the action stick and be more real.
sushid 7y ago
I might have recommended this for someone in college in 2000 but this is unrealistic for any reasonable person. Paying cash for a TV at a physical store?!
- detaro 7y ago
  The parent comment covers cases like your example, so why try to twist that into not being for "any reasonable person"?
- satysin 7y ago
  To clear up any confusion I bought the TV online (so with my credit card, then paid it off in full that month). While I did go to a store to compare a bunch of TVs it was much cheaper to buy online. My comment about buying the TV was related to not feeling guilty spending several thousand Euros on a TV because we live off a single salary therefore saving it. What exactly do you find "unrealistic" about using cash over a debit card for day to day purchases like lunch, grocery shopping and such? This is where I find I "lost" most of my money. Lots of 'invisible' (to me at least) purchases could easily suck over €1000 a month from my account alone. Using cash forces me to think about small but frequent purchases. Looking at my previous spending patterns I save between €350-400 a month by using cash over my debit card. With all of the other changes I have made regarding diet that goes up to over €500. And remember this is just my spending. My wife also saves several hundred by using cash over her card as well as she had fallen into the same trap as I of blindly buying with card and not thinking (much) about what it cost. Obviously a large purchase I do with a credit card for the added protection but I rarely make large (>€100) purchases.
eb0la 7y ago
I find this fascinating because in Spain we are in a quick restrict-access-to-cash spiral with banks shouting down offices every.month and getting an ATM nearby is increasingly hard unless you live or work in the center of a big city. If you actually touch the money, you can feel easily how much is going out. Plus, I guess having to go to an ATM to get money out makes it more valuable because you pay everything with both money and time. Good trick
- sokoloff 7y ago
  We make it a point to have our kids spend their money in the form of physical cash (and they’re the one to hand it over to the cashier at the store and take the change back). Otherwise, it’s unapproachably abstract for them. We don’t extend that to our adult spending though.
- benbristow 7y ago
  I feel the opposite. I use a Fintech bank called Monzo that's available in the UK and is now expanding into the states. When I have cash it feels like Monopoly money that I can splash on anything. When using my card I get instant notifications as soon as I pay and the notification gives a running total to how much I've spent in the day. Also shows me how much money I've got to last me into payday taking into account recurring payments like bills, online-services etc.
balladeer 7y ago
I'd love to use cash. Only downsides are lack of change, it's always an issue, and it adds to the wallet thickness. For me credit card works just fine. Somehow credit card has never felt to me like a credit instrument. For me it's always been offers, deals (when I have to buy something), free lounge/spa access, and free points. I have also set 3 limit alerts on my main credit card which does my ~90% of expenses usually and last alert means no more use unless something really urgent comes up. If I need to buy something it goes to my "Buy" list on my todo app and depending upon the urgency either right then or during a sale I just check that "Buy" list and buy all or some of it. I don't buy anything else on impulse except books which are not very often and are not expansive at all. Food/eating out is the only thing I have budgeted. This has worked fine so far. Touch wood!
- lostlogin 7y ago
  > it adds to the wallet thickness. This was an irritating thing. My wallet has been one card stuffed in the back of my phone case for about 10 years now. One less thing to keep track of. It goes against the grain here, but going 100% cashless has improved things for me and has reduced my spending. The extra points on the credit card are nice and the crud and shrapnel that used to accumulate in and around my wallet are not a thing anymore.

Hackbraten 7y ago

How do you feel paying in cash helps compared to cards? I honestly don’t get it. For me, withdrawing and paying cash simply adds unnecessary complexity, and on top of that, it destroys any paper trail you may need for tracking your individual budgets. How come people (mostly in Germany, from my experience) are so obsessed with cash?

sshine 7y ago
Having recently received private financial advisory, my advisor recommended that I do exactly this: Withdraw cash weekly, use only that cash to pay for food. Supposedly, it will make you more aware of how your spending affects your balance. Swiping a card "feels free".
- lostlogin 7y ago
  > Swiping a card "feels free" Could this relate to age or how one grew up? It doesn’t seem like one abstraction is really all that different from the other.
  - newnewpdro 7y ago
    Cash is physical, it's tangible, exists in your hand/wallet, occupies space, carries weight in the real world. It's experientially very different to spend, and for me at least, carries substantially greater negative feedback as my wad diminishes in transactions. Then having to replenish my stash, visiting an ATM or asking for cash back, carries a distinct bite. Those things are largely absent when using cards or other electronic payments like phones. Though you can structure electronic payments such that it at least draws on a very small account requiring explicit replenishing of some inconvenience, to retain some of the bite as weekly or monthly funds become exhausted.
smileysteve 7y ago
The idea is that all of that unnecessary complexity helps make the expenses more tangible. So you're paying with 20s instead of a swipe. This isn't as much of a problem for the thrifty whom feel similar anxiety in using a card. Most likely people who are actively keeping a mental track of where their balance is after every purchase - or using a ledger.
astura 7y ago
The idea is you spend less if getting your money is unnecessarily complicated. Plus since you can physically see your money going away it "hurts" more so you'll be more likely to spend less. This doesn't "work" for everyone. OTOH what really helped a family member of mine understand how much he was spending was getting a credit card. He was on all cash for years and then moved to all debit. Never had any idea what he was spending because if he needed cash he'd just hit up the ATM or when he was using debit just swipe. He always spent less than he had/made but he wasn't paying attention to the amount on a larger scale. Once he got a credit card (at my suggestion) and started putting everyday purchases on it the bill would come at the end of the month. When he say down to pay it off he had to confront the entirety of the money he spent that month. He'd say "what the hell did I spend ${amount} on?" and he'd comb through the transactions and get a much better idea of his spending habits and was able to reduce the purchases that weren't providing him much value.

newscracker 7y ago

Tangentially related: ever since I read “In Praise of Cash” [1], I started doing as many transactions as possible in cash. I make sure I carry enough change in different denominations so that I can pay almost any amount without having to worry about inconveniencing the receiver for change. It may seem like a hassle to others, but I’m ok with this. [1]: https://aeon.co/essays/if-plastic-replaces-cash-much-that-is-good-will-be-lost https://aeon.co/essays/if-plastic-replaces-cash-much-that-is...

late2part 7y ago
This is somewhat similar to what You Need a Budget ("YNAB") does. Whereas you are prepared for any transaction and deliberately process it manually; YNAB forces the user to manually document and enter the transaction, recreating a similar process as you do physically. This creates a tangible transaction in the human's brain - making the action stick and be more real.

sushid 7y ago

I might have recommended this for someone in college in 2000 but this is unrealistic for any reasonable person. Paying cash for a TV at a physical store?!

detaro 7y ago
The parent comment covers cases like your example, so why try to twist that into not being for "any reasonable person"?
satysin 7y ago
To clear up any confusion I bought the TV online (so with my credit card, then paid it off in full that month). While I did go to a store to compare a bunch of TVs it was much cheaper to buy online. My comment about buying the TV was related to not feeling guilty spending several thousand Euros on a TV because we live off a single salary therefore saving it. What exactly do you find "unrealistic" about using cash over a debit card for day to day purchases like lunch, grocery shopping and such? This is where I find I "lost" most of my money. Lots of 'invisible' (to me at least) purchases could easily suck over €1000 a month from my account alone. Using cash forces me to think about small but frequent purchases. Looking at my previous spending patterns I save between €350-400 a month by using cash over my debit card. With all of the other changes I have made regarding diet that goes up to over €500. And remember this is just my spending. My wife also saves several hundred by using cash over her card as well as she had fallen into the same trap as I of blindly buying with card and not thinking (much) about what it cost. Obviously a large purchase I do with a credit card for the added protection but I rarely make large (>€100) purchases.

eb0la 7y ago

I find this fascinating because in Spain we are in a quick restrict-access-to-cash spiral with banks shouting down offices every.month and getting an ATM nearby is increasingly hard unless you live or work in the center of a big city. If you actually touch the money, you can feel easily how much is going out. Plus, I guess having to go to an ATM to get money out makes it more valuable because you pay everything with both money and time. Good trick

sokoloff 7y ago
We make it a point to have our kids spend their money in the form of physical cash (and they’re the one to hand it over to the cashier at the store and take the change back). Otherwise, it’s unapproachably abstract for them. We don’t extend that to our adult spending though.
benbristow 7y ago
I feel the opposite. I use a Fintech bank called Monzo that's available in the UK and is now expanding into the states. When I have cash it feels like Monopoly money that I can splash on anything. When using my card I get instant notifications as soon as I pay and the notification gives a running total to how much I've spent in the day. Also shows me how much money I've got to last me into payday taking into account recurring payments like bills, online-services etc.

balladeer 7y ago

I'd love to use cash. Only downsides are lack of change, it's always an issue, and it adds to the wallet thickness. For me credit card works just fine. Somehow credit card has never felt to me like a credit instrument. For me it's always been offers, deals (when I have to buy something), free lounge/spa access, and free points. I have also set 3 limit alerts on my main credit card which does my ~90% of expenses usually and last alert means no more use unless something really urgent comes up. If I need to buy something it goes to my "Buy" list on my todo app and depending upon the urgency either right then or during a sale I just check that "Buy" list and buy all or some of it. I don't buy anything else on impulse except books which are not very often and are not expansive at all. Food/eating out is the only thing I have budgeted. This has worked fine so far. Touch wood!

lostlogin 7y ago
> it adds to the wallet thickness. This was an irritating thing. My wallet has been one card stuffed in the back of my phone case for about 10 years now. One less thing to keep track of. It goes against the grain here, but going 100% cashless has improved things for me and has reduced my spending. The extra points on the credit card are nice and the crud and shrapnel that used to accumulate in and around my wallet are not a thing anymore.