In honor of the upcoming cash spending experiment I wanted address the benefits and drawbacks of spending cash. I will revisit this list after the cash experiment to see if I have anything to add or critique. Benefits of Spending Cash First and foremost, spending cash makes it impossible to spend more than you have. Going into debt is impossible with cash. Forces us to face the consequences of a purchase up front rather then delaying it until after it is too late. Thinking through the consequences of a purchase may change your decision. By consequences, I am talking about [...]
Read MoreJune 2007
With June drawing to a close, I wanted to lay out the plan for the cash only spending experiment in July. I talked about the impetus for the experiment in the ditch the credit card and save post. Using the scientific method here is the break down of the experiment : Goal : Test whether spending only cash will save 12-18% as Dave Ramsey suggests. Hypothesis : Spending only cash will reduce the amount of money consumed in a given month. Control : Currently the plan is to compare the cash only spending to the average of the previous 2 [...]
Read MoreAs The Rockette, The Pebble, and myself traveled down to the New Jersey shore for a weekend of camping at the Frontier Campground, I was thinking about a few articles I had planned. I didn’t bring the laptop, but I was all set to outline a few articles. I made an off-hand comment to my wife about how I haven’t been able to get to anything done on my ‘in between MBA classes to-do list”. At Drexel University I get about a 1.5 – 2 weeks off in between quarters. Since two classes takes about 9-15 hours a week for [...]
Read MoreWe want people to accept us, it is a fact of human nature. Time and again you hear people sharing the same thought on friendship, “I want a friend that accepts who I am”. That sounds noble and uplifting enough, but let’s take a deeper look into that idea. Think about examples of people for whom nothing is ever expected. What becomes of the child whose parents give them everything, yet don’t expect anything? Your dog Max accepts you, and so does a car salesman, or even a drug dealer. The question remains, “is that enough?”. I say no. Personally, [...]
Read MoreIn the previous post on how friends can shape our perception of reality, I ended with an example about my goal to become an entrepreneur. I came to the conclusion that there is not anyone in my life that can really understand and support that quest; they are all 9-5′ers. Some may even provide resistance. The truth of the matter is that we need some friends in our lives that will be able to challenge us, teach us, and relate to our unique struggles. I think most of us know this instinctively, but the real work comes when we have [...]
Read MoreThis post will be part of a larger series called Friends Matter, which will discuss some of the ways that our social networks can support or hamper our personal journeys. “She has been starting to run with a bad crowd.” At some point we have all heard a parent respond to a question about their teenager’s objectionable behavior with this common phrase. The underlying principle is that ‘who we associate with can play a big role in our choices and actions’. Ironically, we don’t see parents responding with “He has fallen in with a good crowd” when someone complements their [...]
Read MoreI proved in my article about delaying gratification how buying a starter home could save you large sums of money. I want to reiterate the financial benefits of not over stretching ourselves and the drastic difference it can make in our long term wealth. It would take a whole other post to explain how helpful it has been to start a marriage with low financial stress, and how big an impact it has made in our wealth and vision for the future. With that said, let’s look at some of the other benefits of buying a starter home. I am [...]
Read MoreRemember the ‘Marshmallow Test‘? It was a study from the 1960′s which found that preschoolers who were able to delay gratification at four years old were more likely to be socially competent, assertive, trustworthy, dependable, able to cope, and likely to embrace challenge. The ability to control our impulses will encourage success in most areas of our lives. Our relationships, careers, money, and wealth will all be positively affected by being able to delay our gratification. As an example let’s look at two similar families who want to own their $300,000 dream home. They both have a $60,000 down payment [...]
Read MoreConsider two similar working mothers: one who wants to get out of debt because a few of her friends starting getting our of debt. The other woman decides to get out of debt, so that she can provide a more secure environment for her children by quitting her job to pursue a life goal of staying at home full time. If you had to bet on which one will succeed at becoming debt free, which one would it be? Maybe the example is too simplistic, but I hope the point is clear. Having goals is very helpful, but having purpose [...]
Read MoreI admit it, we do 95% of our spending on plastic. We have been using our debit and credit cards for years to pay for just about everything. The discipline is there, so everything is paid in full at the end of the month. $20-$40 cash lasts me the whole month. The system works for us, because we have discipline and are not big spenders. Also, downloading the transactions to Microsoft Money is a quick and convenient way to track your spending. With that in mind, I remembered Dave Ramsey saying that you spend 12-18% less when using cash. Spending [...]
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