This is my very first time doing Tightwad Tuesday.  My tip for this week is a very obvious one to some of you, I am sure, but it is so important that it bears repeating here. 

Spend cash.  Spend ONLY cash.  This is not for things like the mortgage or electric bill which come out of your checking account, but rather is for discretionary spending… ie, shopping. 

Statistics show that you will spend AT LEAST 12-18% more on average if you use a debit or credit card than if you use cash.  I am going to assume for the sake of this post, though I know it is probably not the case, that every person who reads this does not use credit cards.  But, it is important to realize that debit cards are not the same as cash.  Think about it.  Banks and retailers are in it to make money.  Your bank does not get interest from you if you are using a debit card, so why would they spend money to produce the card for you?  No, it’s not for your convenience.  (If they cared about that, they would pay your overdrafts with no fees.)  It is because they get paid a fee by Mastercard or Visa, who in turn gets paid a fee for use by retailer who take your card.  So why would retailers want to pay 2-4% to take your debit card?  Again, if you think it is for your convenience, think again.  (If they were out for that, they would put the milk in the front of the store.)  It is because they know you WILL definitely spend that 12-18% more in their store with the plastic, thus justifying them paying the small fee for higher sales.

Yes, it involves a few extra steps like budgeting and then getting the cash out for the categories you spend at the store (Like groceries or gas.).  And you may have to come up with creative solutions for some issues.  For example, I hated spending cash at the gas station because I had to herd all 3 kids out of the van and go in to the store to pay rather thank paying at the pump.  So now I take my cash, purchase prepaid gift cards for my regular gas stations, and then use those since they are finite like cash. 

The payoffs are definitely worth it.  Want to give yourself a substantial savings with very little effort before you even enter the store?  Well, take my tip for this week and USE CASH!