The holidays are behind us, and the New Year has begun. Where are you in the classic struggle of cash or credit? Did you use more credit than cash to get through the holidays? Are you feeling the pinch of “holiday blues”?

Let’s look at this age-old debate of cash or credit. Yes, it’s so easy to swipe that credit card. You’ve only spent $7 at Starbucks about 15-20 times this month. You don’t think about it for 30 days… and then you get that statement and cringe at just how many times you’ve swiped.

What are the Benefits of Using Cash?

  • You can only spend what you have. Paying with cash keeps you from spending money you don’t have. This means, if it’s not budgeted for at the beginning of the month, you can’t spend it at the end of the month.
  • Studies show you spend less when spending cash. A study from the Journal of Experimental Psychology: Applied found that it’s psychologically less painful when you use a credit card over cash because it feels like you’re spending “future” money, rather than present money. Spending cash makes you think about your purchases twice before you spend it.
  • Paying with cash reduces your chances of having your identity stolen. According to the 2021 Identity Fraud Study released by Javelin Strategy & Research, criminals made off with $13 billion in 2020 by stealing people’s personal financial information. Each time you swipe a credit card, you increase the chance of identity theft.
  • Cash doesn’t come with fees. Some places require a minimum purchase to use a credit card, meaning you may have to spend more than you planned. Some places don’t take credit cards at all, and you must find an ATM machine if you want to make that transaction and often pay a fee. Cash is usually accepted in more locations, with no fees.

Why Do People Use Cards?

  • Making purchases online. I only have two words: DEBIT CARD. Debit Cards are the same as cash in the sense that you can only spend what you have. And it’s just as secure as using a credit card.
  • Making travel arrangements. Again, use the debit card. There may be a temporary hold on some funds, but if you budget for your trip just plan for this additional charge. If you don’t have any additional incidentals, you get that deposit back.
  • Cash back. Here’s the truth: cash back rewards programs do not mean money in your wallet. To get $100 back, how much do you need to spend? And when you get that $100, it usually goes to paying off your credit card statement. So, who’s winning here?
  • Control your spending with tracking. Check that statement. How many times did you swipe at 7-11 or Dunkin Donuts? Why did you spend $100 a week at Giant or Safeway when your grocery budget was $450, and you spent it all at the beginning of the month?

The Best Plans are the Ones We Put into Motion

How did you do this holiday season? Are you dreading opening your statement this month? Are you wondering how you’re going to make it in the next couple of months? Remember your budget does not need to be stressful. It is a habit that alleviates financial surprises. Contact me today and set up a time to go over your plan and how to best execute it. The best plans are the ones we put into motion. My calendar link can be found at