Cash is King
‘Cash is king’: If you always pay cash, you don’t get into debt.
Somewhere along the way, this has been forgotten. I know I was aware of it before my children were born.
My father never bought anything on credit except his house; I think my parents bought their first car on credit when I was already in my 20’s and they also never bought new cars. My mother got her first brand new car when she was in her 60’s.
Phumelele Ndumo in her book “From Debt to Riches”, says that the only credit we should ideally have is our bond. She states that her Edgars® card is only used for getting her spectacles once a year.http://www.thuthuka-sa.co.za
If you are on a hospital plan and you wear glasses, this is probably one of the best ideas I have come across.
One at a time
In a family of 6, we all wear glasses and are on a hospital plan with savings, which does not cover everyone’s specs. This year 3 children got new glasses through the medical aid and one got hers through my Edgars account. Next year goes to my hubby and I and the two children who really need glasses full time.
The places I am really good with cash only are my weekly grocery shopping, petrol and money for school. This is all due to envelope budgeting.
Envelopes for cash
Envelope budgeting is where you mark different envelopes with different household expenses, put cash in the envelopes and then only use the cash inside. Read more here https://kasheringyourlife.co.za/envelope-budgeting/
For my monthly groceries and other expenses, I try to only use my debit card. A debit card is the same as using cash in that you can only spend the money that is on the card. The disadvantage is that you will still spend more than you need to because there is no tangible, physical exchange of cash.
Cash creates awareness
When paying with actual cash, you become more aware of your spending as you have to hand over the money rather than just swiping a card.
The debit card, while still only allowing you to buy with the money you have, is still a transaction once removed from the touch and feel of paying with real money.
It goes without saying that paying cash for things like your bond/rent or car repayments, is not a viable option and certain transactions have to be done online.
Not too much
Obviously, for safety’s sake, you are also not going to walk around with wads of cash on your person, as this makes you a target for thieves.
So if you are going to buy a large item. for instance, possibly a washing machine, then put only that exact amount into your debit card so that you can only buy that item. If you are doing your weekly shopping you shouldn’t need more than R500 on you.
Paying only for items you want in cash is a concept my late father lived by. So when you are thinking of buying something that you have to pay off, like a car, try to make sure you have as much money for a deposit as you can afford, so that you can pay off the debt on the car quickly.
Only houses should not be bought for cash.
What is your preferred method of paying for small items? Do you do your grocery shopping monthly, daily or weekly?
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