We stopped using credit cards months ago — here's how it's changed our spending by Jason Price on Dec 1, 2015, 2:00 PM Advertisement
 Do you pay with cash, debit, credit or a combination of the three? Some people use credit cards to pay for all of their expenses, earn rewards and then pay the balance off each month. Others use cash or debit and follow the viewpoint of Dave Ramsey – credit card rewards aren’t worth “playing with fire” that can lead to overspending and possibly, debt. Also, it’s proven you spend 40% more with credit cards versus paying with cash. My wife and I used credit cards as our primary form of spending for years. A few months ago we decided to make a switch to go all-in with Dave Ramsey cash envelope budgeting and honestly, haven’t been happier with things since. We paid off our credit card balances and started using debit for bills and regular expenses, and cash for everything else. Sure, it took some work to make the transition, some behavior change and giving up earning miles and rewards. However, making the switch has provided some benefits that we never would have expected. Here’s a look at five of them: SEE ALSO: 10 ways to save money, from a couple who lives on $13,000 a year We stopped spending ahead. While we’ve always used a budget and tracked spending diligently, we found ourselves spending ahead more times than we knew was probably healthy to do. We would choose to spend ahead in the areas of entertainment or dining out. Or, we would spend ahead on the kids when we felt like they needed something for school or for some other activity. The convenience of the credit card made it easy to spend ahead a little bit and figure out how to pay for it later, or just balance it out at the beginning of the next month. Doing so put us in a catch-up mode. Overall, we’re not talking about a lot of debt, and we still had constraints not to spend ahead to an unmanageable amount. However, doing so is never good practice and can add up if you’re not careful. It also started to cause stress in our relationship and we knew that was a symptom of what could become a larger financial problem. Since making the change to cash and debit, our choice to overspend has simply disappeared. Why? We believe it’s because we’re now forced to solve problems, or to simply wait until the money is available.
 We problem-solve more. Paying by cash and debit has forced us to become better at problem solving. As mentioned above, we wouldn’t solve our shortage problem. We’d just spend! Now we have to problem-solve. We have to seriously evaluate the necessity of our expenses, force ourselves into saying “no” a lot and spend only what we have available in our account or cash envelopes. We can’t use credit cards to bail ourselves out even if it’s a small amount. Our only source, if the gap is truly a need and it’s large enough, is to use our emergency savings account. That’s obviously something we’ll always do our best to avoid unless it’s absolutely necessary.
We experience less financial tension. While we never argued about money or why someone had spent money on something, we did experience tension when reviewing our budget and finding shortages. This led to stressful discussions from time to time. However, now that we pay with cash and debit, we haven’t felt this type of tension in over 6 months. Why? I think we’re more thoughtful about our planning. It’s simply more difficult to use cash versus the convenience of a credit card. If we don’t have it, we can’t spend it. Easy as that.
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