My Date With Cash

This is the first time that I've written about personal finances, which makes everyone a little uncomfortable. We are all painfully aware of the shortcomings of our spending habits and we fear the judgement of others. But maybe our fear to disclose, like that of the abuse victim, lets someone else off the hook, ie the banks.

I try to hold off on my New Year's resolutions until my birthday, which is today, because this is usually when I have a better idea of where I stand (read: the bills have come in). I have a decent job, my husband works and we live relatively modestly. Because we have young children, we don't go out that often. Instead, we tend to stay in and read or work on our computers. In other words, we're not big consumers because we have everything we need. Yet, come bill time everything seems tight like when I was a student.

Unlike most of my fellow educatees at university, no parent was footing the bill. I paid for everything through summer employment and a part-time job during the school year. I applied for grants and loans and I lived a very simple existence, buying bulk food and used text books, and only splashing out on a daily cup of coffee. I watched my finances closely and kept a running tab on my desk of everything I spent. Clothes were bought either on sale or with small imperfections so  that I would get a discount. And let's not even talk about some of the living arrangements I endured for the sake of cheap rent. I also discovered the joy of haggling, which is not a common practice in Canada, but you'd be surprised how often people are willing to go down in price. Besides, the worst a retailer could say was no.

I was really proud of completing university with only a small amount of student debt, which I paid off two years into the repayment schedule. But what has happened since then?

I spent a considerable amount of time poring over my finances this month. I discovered that I pay at least $5.00 a month in interest on my credit card, and in those few ridiculous months when I've taken a small cash advance, I've paid in excess of $20 a month in interest. And this was just one of the problems. The other was using a debit card too often. I'd always worked on the premise that if I carried cash I'd spend it, so I opted for debit. But here lies the problem. Every time, I go into my overdraft I pay interest effective the day this transaction is posted. But I usually don't know that I've gone into my overdraft until after I receive my bank statement at the beginning of the next month.

I spoke to my husband about this, and he too had noticed something similar. We decided to stick to just using cash and writing the odd cheque for the next eight weeks to see how we fare. Will this forced use of cash make us more conscious of our spending habits or will we rack up ATM fees because we're never close to a bank machine at our bank branch? We'll be keeping tabs. At any rate, this will certainly be a test of strength. January is after-Christmas sale season. . . .

 I'll report back. Click here to see what I discovered about two months later.

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