Marek and Lori Fuchs have never fought in their 20 years of marriage—except over money. In this column, Mr. and Mrs. Fuchs, a real-life married couple with three kids (ages 11, 7 and 5), will articulate their very different approaches to personal finance. Last round, they butted heads over whether to save for their children's college.
This round: She says, "We'll use cash, not credit cards, to pay daily expenses." He says otherwise.
Mrs. Fuchs says: Listen up, big spender. From now on we’re only paying for our daily expenses in cash.
Credit cards are like those bad boyfriends I had before I met you, honey. They look good, promise me the world but quickly turn demanding. I know cards are incredibly useful—hey, I’ve had intense relationships with several. But there is a certain psychology that flares when you’ve got a pocket full of credit cards. The things that we want become things that we need.
Just last week, I needed new sunglasses (I really needed them, because I, uh, I lost my old ones). I went to Sunglass Hut where, naturally, I’m immediately drawn to these great looking glasses by, let’s say, a big brand. I didn’t look at the price but was ready to whip out my credit card. But wait. I’m paying by cash these days and need to stay within what I had in hand, so I look at the price. I put them back and hunted for a more reasonable pair. See, I saved myself—I mean us—by paying cash.
Sure, you need them to make plane reservations and shop online, but it is easier to stick to a budget if you use cash all other times. That, my friend, is our new program. Now let me have your card.
Mr. Fuchs says: Carrying around a wad of cash has been widely accepted since the earth cooled as the best way to get mugged. Moreover, if a credit card company did not keep record of my expenses, I’d have to divine my deductions at tax time.
As far as your newly declared policy goes, what happened with talking things through?
Mrs. Fuchs says: I have been talking things through and I took notes. Pay attention:
“Spending money just feels different if you pay it in cash,” says Scot Stark, the president of Stark Strategic Capital Management in Freeland, Md.