Paying Cash

Heather - Cincinnati, Ohio
Entered on October 21, 2008

Wachovia bank, one of the Wall Street banking disasters, seems hard pressed to account for 53 billion in debt. Then again, I couldn’t fully account for $35,000 in debt I’d accrued between 2001 and 2004. Wachovia claims only a quarter of the debt was mortgage securities and some of it was construction loans. They’re still scratching their heads, how did that debt get so large? My spending habits didn’t seem out of the ordinary, I bought clothes at TJ Maxx, gave birthday and Christmas presents under $50, and took some art classes. But the numbers don’t lie. Today, I believe in paying cash.

I divorced Visa four years ago. Visa took me where I wanted to be and along the way I managed to acquire $35,000 in debt with only one credit card. For four years, I paid off the maxed out card off with a student loan at the beginning of the semester and maxed out again by the end of the semester– repeating this cycle eight times over leading to $35,000 in debt mostly owed to US Department of Education. Always promising myself with each student loan, this would be the last time. Shortly after getting married in 2005, I wanted off my financial Titanic. While I hadn’t cared about sinking myself, I didn’t want to drown my husband with me—a man with savings in the thousands in contrast to my $10 checking balance.

All my sources for self-help, a couples’ money book recommended by the therapist and a support group for compulsive shoppers, sang a unanimous chorus: cut up the credits cards and start paying cash for life.

Tired of feeling guilty, ashamed, and stressed out every month when the bill arrived, I grew willing to experiment with life without credits cards. Honestly, I had nothing to lose cutting up Visa. Besides, if I ever changed my mind, a replacement card was easily attainable. This new cash lifestyle shrank my anxiety and the monthly Visa balance stopped growing. Instead, it started dwindling with each payment.

Life with cash taught me to plan for Christmas (comes every year on December 25) and to relax in January when no bills arrive. I learned where I like and hate to spend money. I loathe spending money on cars, so I drive a 1995 Toyota Camry. I like spending money on wine, opera tickets, and baseball games with my husband.

Life with cash means it’s okay if I don’t have the money right now for those great black patent flats because I had hair highlights. The shoes will still be there in two weeks when I get paid again.