Living on Cash

Hand holding fanned out Canadian money.Living on Cash

Every time a new client is told that they have to surrender their plastic when they file a debt consolidation proposal or bankruptcy, they get this blank look on their face. The look translates into: How am I going to live? The answer is: quite well, thank you. By spending millions of dollars on advertising, the lending institutions have convinced all consumers that we need credit cards to show the world how
great our credit is. A gold or platinum credit card is somehow the best. And we get points also – over the next eight years, you will be able to fly somewhere at a time of year that you would not go anyway. Buying something for cash, shame on you. It must mean that you have no credit. At the very least, it means that people with lots of cash, will find you pretty soon.

Who do you think is paying for all of these frills and loyalty programs?  Of course, it is you. Don’t buy into it. There are enough deductions from you pay cheque that you cannot avoid. Why volunteer more?

Living on cash (or close to it) means that you are in absolute full control of your spending. You likely have budgeted your spending habits so that you know what your basic weekly or monthly repeating costs are (rent, food, clothing, transportation costs, etc.) as well as the variable “feel good” costs of entertainment, restaurants, vacation, gym, etc. Of course, emergencies will always happen. So, open a savings account and put a small amount away by a regular automatic payroll deduction similar to what you are likely doing for an RRSP.

You should also have a credit (even a prepaid credit card) for an immediate emergency. It should have a reasonable limit and be used only in a true emergency. Think “need” instead of “want.”The best result of cash is that I always spend less when I am paying cash. Your mind seems to be telling you that you are actually spending money that you worked hard to earn. Not a bad thought to keep.

Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.

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