Wednesday, December 14, 2011

My Wallet Economics


I guess I’m just old fashioned, but I still like carrying cash in my wallet. Don’t hold it against me. Heck, I think it even helps me in a way. In fact, I think that carrying cash actually saves me money, and might even save you money if you consider a few of my theories.

What Lurks Within
I know pretty close to exactly what is in my wallet at all times. Not only the amount of cash I have on hand -- which is important for keeping an eye on how much I’ve spent and what I have left to spend -- but also the various cards inside my wallet. The knowledge of how much money I carry makes me think a little harder about my expenditures as the size of my cash laden wallet gradually shrinks to a more emaciated form, and tends to rein in my spending.

The inventory of items I carry is important to have locked inside my brain because this way, if I lose my wallet, it is stolen or if I happen to drop a card somewhere during the course of the day, I know what is missing and can take prompt action to ensure I report the loss to the proper party or parties.

Two-section Break Down
I have a front and back section to my wallet. In the front, I keep my budgeted spending money for the month. This money includes entertainment, food, and miscellaneous money -- mostly any items that aren’t things like utility bills, rent/mortgage, insurance, and regularly billed items. I know exactly how much is there -- say $300 -- so at any moment, I can pull that cash out and know exactly where I am with my “fun” money budget. And once this money is spent, it doesn’t get replaced until next month.

I was in a car accident once (before I began this wallet strategy) and the tow truck driver that came to pick us up would only take cash. We therefore had to find a place to get cash to pay him, during a time that was less than ideal. In the back section of my wallet, I now carry a reserve amount that is specifically for emergencies (such as an issue with my debit card or a situation that calls for cash) or special spending, and that I try not to touch unless I have to.

This money carrying strategy works well for me since I’m a responsible spender, but I wouldn’t necessarily recommend it for those who find that they spend cash readily if they have it on hand.

The Secret Stash
I also keep a little secret stash that up to this point, I’ve never had to touch, but it’s there if I need it. It’s only about $15, tucked away in one of those side pockets of my wallet, but in a pinch it can be a little lifesaver. A meal, a few extra gallons of gas, a taxi ride home or whatever; it’s nice to have that little peace of mind socked away.

The Credit/Debit Card Hide
I finally got rid of my last credit card, but I still have a debit card. Even though I highly dislike debit cards, I like to have one as backup. However, even though I carry a debit card, I don’t really like to see it because it’s one of those little temptations that can get me in trouble because of its convenience. Therefore I use a little psychological trickery.

I tend to put my debit card behind other cards in my wallet. Not only does this keep it “out of sight out of mind,” but it reduces the chance that when I go to pull out cash or another card such as my driver’s license, I won’t accidently drop my debit card in the process…a potentially costly mistake.

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