Paying Cash Saved Us Over $1,000

by The Happy Rock on June 6, 2008

I talk often about the benefits of paying cash and the credit card premium, but just recently The Rockette received a first hand lesson about how paying cash can save you money.

cash-child-baby.jpgThe Rock Garden had to hire a new babysitter a few weeks back who wanted to get paid in cash rather than by check. The Rockette works 18 hours a week as a Registered Dietitian Consultant and would now be handing over the cash on Friday afternoons instead of me writing a check with the bills. The second week she had to hand over $212 in cash to our new babysitter and it hurt. Normally, I would have written a check and not given it too much extra thought, but this time it hurt. The Rockette had something tangible to help visualize all the money the was being spent. The intangibility of the babysitting services made even more of a stark contrast. The same principle works in reverse for credit cards. Since we can’t see or feel the money leaving our hands, it is often easier to overlook the real cost of what you are buying and charge more than you would have paying cash.

So how did we save money? Well, we decided that she would get into work an hour earlier each day the babysitter is there, which save us an hour each day on the back end. $24 dollars saved a week, just because paying cash hurt. Sure, we have to get to an ATM each week to make sure we have cash and the Rockette has to get up a little earlier, but those two simple changes will save us over $1,100 in a year.

{ 4 comments… read them below or add one }

Frugal Babe June 7, 2008 at 2:22 pm

I know what you mean. I hardly ever have cash, as all of our paychecks are direct deposited, and we put all our expenses on a credit card. But when I do get cash, I hoard it, because it’s much harder to part with than it is to hand over a credit card.


aroD June 7, 2008 at 11:25 pm

That’s absoulutely right! You won’t feel how big your expenses just by mentally computing or swiping your card! You’ll eventually think that “you can always use your card whenever you want.” And that’s exactly what you’ll be doing.
On the other hand, you’ll learn MORE how to budget your expenses merely by using cash. You have limited money so, you’ll allocate those wisely.

I’m one of those thrifty person and I fully understand what you have said so, if possible, I would also pay cash!


Ed June 9, 2008 at 8:39 am

Now cash can ‘save’ you on gas too. Here in Zoo Jersey the cash price per gallon is sometimes 10 cents cheaper.


Gloria June 20, 2008 at 11:10 am

Yes, trying to pay cash any time saved me some money.


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