I have to admit that I was initially afraid to switch from using a hybrid budget (cash and credit) to an all cash budget. In fact, for quite awhile I was a huge fan of Dave Ramsey’s and would listen to him daily while I worked. I was 100% convinced that a cash budget was the key to paying off my debt. But my zealot fervor started to wane when I decided the Dave was a little too angry for me to be listening to every single day. So, I quit Dave Ramsey.
The thing is, even though I quit Dave. I still should have switched to cash. But, I didn’t and during a moment of depression I managed to dismantle several years worth of hard work in a course of about 6 weeks. Yep, I was killing it financially until I wasn’t.
The problem was that I planned to work for myself upon returning from an extended trip overseas. I knew that the boring gravy train of office work was coming to an end and that things would have to change on a very deep and fundamental level in order for me to move forward.
As I lay on the beach in Hawaii after spending months meditating on my life, my dreams, and my hopes I discovered something revolutionary. I didn’t need credit anymore. Seriously.
I had spent a number of years working on gratitude, happiness, and killing off all of my bad habits. My incessant shopping, being checked out on what was going on financially, and I just got tired. The conversation about being in debt had become so old. I was tired and just over it. I wanted to meet the man of my dreams, I wanted kids, and I didn’t want to have a conversation about why I was STILL a hot mess.
I had already purchased a home that currently is almost $1000 less than the average rental price in Denver. I had already purchased an education (and was still paying for it) I had already traveled numerous times overseas and in the U.S. and I had already purchased lovely clothing. All on credit. But, with a comprehensive list like that one, what on earth was left to purchase on credit? I finally, finally saw my out.
So I Switched To Cash-Cold Turkey
The minute I stepped foot back on U.S. soil February 23rd I switched to cash. And, it was easier and harder than I expected for the following reasons: it was easier because I wasn’t interested in using credit. It was also harder than expected because I had no cash coming in. I was starting my freelance career basically from scratch.
In fact, even though I started getting gigs it took almost 6 weeks…until NOW for cash to start coming in every week. It was so tempting to use a credit card to buffer my so called broke life, but I didn’t and I haven’t because I had something to prove to myself. It was time to dig deeper than I’ve had to for a long time and suck it up and learn to manage my impulses.
I No Longer:
- Want what I can’t afford
- Care about proving myself to others. I haven’t for awhile, no I really just don’t care.
- Have anything on my list that I want to buy. I’ve bought it all.
And quite frankly, I was never going to get ahead using credit. No matter how hard I worked as long as I continued to use credit I was never going to get ahead. It was a no brainer.
What Do I Want Now?
- To meet the man of my dreams! (marriage and kiddos)
- Spend time with family
- Rebuild my circle of people in Colorado
- To manage my health and wellness
- Pay off my sh$t
- A car-used and paid with cash
- Trips (that’s never going to change) I have to be honest about myself
Interesting how the first 4 items on my list have nothing to do with money.
Getting Financially Real
Getting financially real for me was the moment when I had to be honest about how my choices affected my life and deciding whether or not I would continue on this path for the rest of my life. I had to ask myself if this is how it’s going to be forever?That’ s a hard question to ask yourself. Is this it?
No.
But, when you say “no” then there is a level of commitment that has to happen. I am the type of person, though, who enjoys a good challenge and the no credit challenge is a tricky one. Because you have to say “no” to yourself instead of saying yes. Living in the U.S. we are surrounded by masses of people who also are trying to manage the the thin line between fitting in, managing our wants, and being financially savvy.
**I have the pleasure of participating in the Financial Literacy Awareness Carnival with a number of wonderful bloggers. Please go to The Heavy Purse for the complete list***
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Wow, Michelle! I’m so impressed that you switched to cash during a difficult time, but it also makes sense. I’m glad to hear you have been able to stick with it, too. And Dave? Yeah, he’s a little too angry and boxed-in for me…. Though a lot of what I’ve heard him say has stuck with me 😉
Let’s just say that it hasn’t been easy, but it hasn’t been as hard as I thought it would be. Once I do a challenge though I’m 100% in so I will stick with the challenge TEHE!! It’s a shame with Dave because he isn’t wrong about using cash. He’s just way too angry (and boxed in like you said) for me to be dealing with. Too much stress.
My real moment came when I opened up my foreclosure notice on my home. I paid off almost 80K in under three years and never looked back. Every time I write an article I write with this in mind – how best to communicate how real you’ll need to get if you’re serious about getting out of debt. Switching to cash was the smartest thing I ever did. Glad you shared that.
That’s deep. AND, that’s an incredibly real moment. I am so proud of you for paying everything off and as serious as I was before now it’s a whole different level. I just want to move on!
I actually put a number of my clients on cash diets to help them get financially real. It’s amazing how skewed your reality can get when you swipe cards all the time and don’t have a real grasp on the cost of your choices. Cash is the best way to keep your expenses in order.
It’s weird because I wasn’t in the habit of swiping my cards all of the time…but the times I DID swipe those were epic. LOL! It has not been as hard as I thought it would be to switch to all cash. And what I’ve discovered is what I REALLY value. If I’m willing to spend cash on something especially this month when I basically don’t have a lot of money-I know I value it. Basically, I’ve only purchased high quality groceries 🙂
We haven’t gone completely to cash but use if for several budget categories. We do use a debit card exclusively which really makes you focus on spending. We spend so much less now than we did when using credit. And after doing it for about 4 years now I can’t imagine going back.
I still use my debit card…but, I’m trying to even cut that down as well. I like to hear how things have been going for you since you switched. It makes me feel like I’ve made the right choice.
I love how you talk about not needing credit anymore and I’m inspired by the discipline you showed when you stopped using credit cards but didn’t necessarily have cash coming in. Since I started freelancing on the side of my current job I couldn’t imagine doing it the other way around and credit cards would definitely tempt me. I’m a big fan of cash only budgets and I’m hoping to switch over as soon as I get my credit established.
It’s weird because I was using a lot of cash, but when I used my cards I USED my cards. I would usually be when I was depressed about something. I just thought that if there is a moment to really gain control of this habit it’s when things are the most intense. If I can manage it this month-which has been super intense re: working but no money coming in quite yet. Then I can do it once the money is coming in a bit more consistently.
I think it’s great you are doing that Michelle. I’m, sadly, doing the opposite now. Because I’m running short on cash I need to make sure I have that for rent, so I’m having to put some expenses like groceries on cc. 🙁 Yup, emergency fund depleted. Time to figure out what’s next.
I had to make the switch because I felt that this would be the best moment to test my resolve. It doesn’t mean that I won’t ever use credit, but that I’m really, really trying to get out of the habit of feeling that it’s an option. Sending money vibes your way!
I love how you’re reclaiming your financial power, Michelle, and being honest with yourself. You have so much to offer and I know you can achieve whatever you set your mind to accomplish. It sounds like a cash diet was exactly what you needed to do. Thank you again for your participation!
Shannon, thank you so much for your kind words and continued support. It is because of you and other super kind and supportive people out there that I continue to fight the fight. I can’t wait to write the “I’m debt free!” post. But, that will in be a few years 🙂
We never use credit- ever and it works. We debit and monitor everything. Cash doesn’t work for us because Mike travels out of town a lot so we debit and monitor closely instead.
I just don’t want to use it anymore. I’ll still use debit cards as I just consider that cash. But, for doing stuff around Colorado I’m really going to focus on rocking out cash and getting more in tuned with my money habits.
Couldn’t imagine a more serene place to come to that realization! I wish you the best of luck on your wants/goals! Think it’s impressive that you’re dodging credit, but it also sounds like you can really do it well with your awareness of your own finances.
Thanks! I just need to focus like I was before and just get it done! It has taken a lot of work to get some clarity on why I do what I do and what it actually costs me in terms of time and energy.