Why You Need a Cash-Only Christmas
11/9/2015 3:16:13 PM

Why You Need a Cash-Only Christmas

It’s the jolly holiday season—but if you’re like most Americans, it’s also the season of overspending and under-budgeting. If so, you may want to consider a cash-only Christmas, says Christa Comeaux, assistant vice president with Lakeside Bank.

"It may not seem practical to carry cash when we’ve all become so reliant on our debit cards, but it’s been proven that people spend less when they have actual paper money in their hands,” Comeaux says. "We’ve become so accustomed to debit cards that we sometimes use them for one- or two-dollar purchases. Imagine carrying cash and seeing that money actually leave your hands. You become much more aware of how much you’re spending when it’s a more tangible transaction.”

Still not convinced? Consider these additional reasons from Lakeside Bank:

In most situations, the majority of the time, cash is much more preferable to credit cards. There’s no hidden fees or interest rates associated with cash. You spend what you spend. End of story. "It’s also much easier to underestimate how much you’re actually spending when you use a credit card,” Comeaux says. "For some reason consumers don’t view credit cards as ‘real money.’ They think of it as something they can worry about later. Unfortunately, ‘later’ usually includes high interest rates and additional fees.”

It’s easier to keep track of cash. Let’s say you budget $200 for a shopping trip. If you use your credit or debit card, it’s easy to give yourself a little leeway; throw in an extra twenty bucks, sight unseen. You can also quickly lose track of where you are in the process, unless you painstakingly record every purchase. "When you have the money in your hands, you know exactly how much you’re spending,” Comeaux says.

You spend less. According to the National Foundation for Credit Counseling, the average person saves as much as 20 percent when they spend cash. "It’s harder to let go of cold, hard money,” Comeaux says.

To encourage the use of cash over cards, leave the debit and credit cards at home before you leave the house. That way you don’t have the option of defaulting to trusty plastic.

"Shifting to cash is easier than you think,” Comeaux says. "It just takes a corresponding shift in your mindset. But now’s an ideal time to make the change. It’s always tempting to spend more than you have during the holidays, and switching to cash can help you prevent that, making your holiday season much merrier.”

For more information about personal savings, or starting a Christmas savings club account, call Lakeside at (337) 474-3766.

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Categories: Finances

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