So I’ve decided that credit sucks really giant hairy balls and that I’m through with it.
See, I’m now in the trap that so many people end up getting into. And dammit, I tried to be so wary of that trap. Even though I thought I was a responsible spender and even though I played by the rules of consuming very carefully, I still got sucked right in and am now like every poor asshole I used to look down my nose at, paying a bunch of money each month toward interest payments on credit and loans.
I didn’t decide that I had to have a big screen TV when I couldn’t afford it. I didn’t really over-indulge. Not at the start.
I blame it on the real estate.
If you’ve been reading this blog for a while, you may know that I have some “really awesome” investment real estate — and I’m using “quotes” around that to indicate something that isn’t “true” at all, kind of like if I were to refer to political “integrity.” My real estate, in fact, is so awesome that it sucked a few thousand bucks out of my life each month.
And, well, you can’t just let that shit go. So you have to borrow from here and there to make up the difference, wherever you can. I borrowed from my checking account, which meant that I couldn’t pay off the credit card in full each month like I used to. I borrowed from credit lines until they were full. And then in a fit of consumerist brilliance, I decided that I had to have this fantastic new lawnmower that saves me like four hours each weekend in the summertime, and so I got it… on credit.
I’m not ordinarily this stupid. Honestly. I’m not “that guy” who needs the sound system and so buys it on the 30-days-same-as-cash plan. The lawnmower was a dumb purchase (although I’d do it again; I prefer spending my weekends with my kids to sitting on a mower), but other than that, almost all of my mess was thanks to those fucking investment properties. You know, the “investment” properties.
So as I’m beginning to dig myself out of the real estate hole, I’ve made myself a few promises:
As I get out of debt, I will do so entirely. As in: Not only will all of my revolving debts go, but so will my home mortgage.
I will not use credit again. Like, at all.
My dad lives in the Italian Market in Philadelphia. It’s a quirky place. He lives in an apartment above a warehouse, and the warehouse staff is like the cast of a cartoon. There’s one guy, Bob, who quits daily and who does each job that’s asked of him fully, but then will stand in one place with his arms crossed and not move until someone assigns him something else. Bob has run for mayor, been interviewed by the news as a government secret agent, and keeps applying for professorships at universities. Last week, Bob demanded double the salary of a woman with one arm because he has two arms. True stories, all.
But another quirk of the Market? Everything is done in cash. Everything.
Every worker is paid in cash at the end of each day.
When a truckload of merchandise arrives, the warehouse manager will pay for it in cold, hard cash.
These people are the reason for those stereotypes of people hiding money in mattresses and taping reserves up in their basement rafters. They don’t have bank accounts. They’re off the grid.
And I’m like, That’s fucking cool.
We’ve gotten really used to credit in our society. It’s easy to buy things without the need for cash — which is probably why we buy so damn much that we don’t need. Even if you pay off your credit card in full each month so that there are no finance charges, I still guarantee you’re buying a ton of stupid shit that you would never buy if you had to hand over bills to get it.
Cash makes you think about each purchase. It shows you in real bills that you keep in your pocket just how much you have left. It makes you say things like, “Meh, I won’t get a latte because if I do, I won’t be able to pick up dinner on the way home.”
I don’t care how disciplined you think you are. It’s psychologically far easier to hand over a card than an equivalent amount of dollars. You don’t have to think about it. Have you seen the credit terminals where you don’t even have to swipe your card, and where you only have to tap your card against the thing? Have you noticed that purchases under $20 no longer require a signature? That’s to make buying faster and easier. No time or need to think.
It’s only a matter of time before a store will be able to scan your card without you having to take it out of your wallet. You’ll take what you want and walk out the door, and a sensor at the exit will recognize you and debit your account. Just like EZ-Pass sensors at turnpike toll booths.
Not me. Not anymore. I’ve started doing what I NEVER used to do. I’m now carrying cash and using it to pay for everything. I never used to carry even a dollar. Multiple times, I’ve had to fill out a form after driving on the turnpike because I forgot to bring toll money, and I have to have them bill me.
Now it’s cash. Cash and cash equivalents.
- I’m paying for large purchases with checks.
- I have recurring bills for website hosting, e-junkie, etc. that used to go on a credit card. I switched them to draw from the cash balance in my PayPal account.
- Some of those companies don’t accept PayPal. So I got a PayPal debit card with that nifty Mastercard logo on it, and gave them that number. I’m paying for aWeber like this, and GoToMeeting. It’s not credit; that amount just comes out of my PayPal account once a month.
I’ve been doing this for a few weeks now. And you know what? It’s really damn cool. Each month, my credit card bill comes and there are no new charges on it. So I can actually pay down the balance I’ve accrued.
And there’s also two surprising, personal side bonuses.
- I feel very unique and awesome, because nobody does this. Nobody pays for things with cash. There’s a new, profound feeling of “I’m doing this right.”
- I feel rich.
Take a look at #2 again. I’m not rich. Not in any objective way. I’m doing well, but I’m still digging out of the real estate hole and repairing the collateral damage it caused. I have a negative net worth. It’s negative enough that I can’t bring myself to ballpark what it might be.
But shit, man. I feel like Donald Trump.
Nobody goes out to dinner and pays in cash anymore. Last weekend, our waitress didn’t even seem to know what to do with the bills I had put in the little folder thingy. I never used to carry even five dollars, and here I am pulling out fifty, in real bills.
And you get to say things like, “Keep the change.”
If you never carry cash, I want you to try something. Put your credit card away for a week. Go get two hundred dollars in cash. Throughout the week, pay for things with cash that you’d normally charge: meals, casual purchases, office supplies, whatever. And check out how it feels.
Two hundred bucks isn’t much today. It’s maybe one and a half times the size of our normal grocery bill. But try walking around with that much in dollars and notice how it feels.
You may feel rich, like I do.
You may feel nervous, like someone will take it. But why would you think that? Has anyone ever robbed you before? Are you advertising the fact that you’re walking around with bills?
Dude. Just try it. You may like it. You may ditch the cards altogether, as I’m in the process of doing. You may learn to hate credit and loans as much as I have.
You may decide to work on paying off your mortgage, no matter how loudly the investment guys yell at you that it’s a stupid thing to do, because if you’re like me, you may find the freedom that would come at the end of a fully paid-off mortgage intoxicating.
Think about it. No bills other than utilities and taxes. How much more relaxed would you be? How quickly could your savings pile up? How easy and cool would it be to buy even big purchases down the road (like your next car) with cash equivalents, right out of the checking account?
This is so awesome. Cash is king.