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Credit Cards (in the US)
Samstag:
--- Quote from: Cakemeister on April 04, 2011, 08:45:07 pm ---I do the same thing (Charge on Discover and pay off by automatic bank payment), but paying cash is better.
The reason is that people who pay with credit cards tend to buy 15% more stuff than people who don't. Now, Dave Ramsey may have pulled that statistic out of his butt, but I believe it to be true.
--- End quote ---
I believe he's right that average person spends more when paying by credit. I would argue that I'm nowhere near the average.
It helps to evaluate your spending on a monthly basis and categorize where the money is going, even if you don't set budgets. But you also need goals. If you don't have any plan for savings then any extra money at the end of a pay period looks like "free money" to a lot of people. I know plenty of people who will spend that money like it's going to expire, and they pay in cash.
ChadTower:
I know I'm sick of hearing about how tight money is from people who run up $150 bar tabs regularly and drive a car $20k more than they need.
Hoopz:
--- Quote from: Samstag on April 04, 2011, 10:27:11 pm ---
--- Quote from: Cakemeister on April 04, 2011, 08:45:07 pm ---I do the same thing (Charge on Discover and pay off by automatic bank payment), but paying cash is better.
The reason is that people who pay with credit cards tend to buy 15% more stuff than people who don't. Now, Dave Ramsey may have pulled that statistic out of his butt, but I believe it to be true.
--- End quote ---
I believe he's right that average person spends more when paying by credit. I would argue that I'm nowhere near the average.
It helps to evaluate your spending on a monthly basis and categorize where the money is going, even if you don't set budgets. But you also need goals. If you don't have any plan for savings then any extra money at the end of a pay period looks like "free money" to a lot of people. I know plenty of people who will spend that money like it's going to expire, and they pay in cash.
--- End quote ---
Spot on. And you are always supposed to "pay yourself" first. Set a goal of how much you want to save on a monthly basis and put that much away so it's not spent on discretionary spending.
ChadTower:
--- Quote from: Hoopz on April 05, 2011, 10:31:13 am ---Spot on. And you are always supposed to "pay yourself" first. Set a goal of how much you want to save on a monthly basis and put that much away so it's not spent on discretionary spending.
--- End quote ---
I put it away away. It's in a separate account at a separate bank in a fairly inconvenient location. No debit card. I'm not even sure where I put the checkbook. No way of transferring money out electronically. It's local, but the only way to get the cash in or out is to drive over during office hours, so I rarely make a withdrawal.
Gray_Area:
--- Quote from: ChadTower on April 05, 2011, 10:48:39 am ---
--- Quote from: Hoopz on April 05, 2011, 10:31:13 am ---Spot on. And you are always supposed to "pay yourself" first. Set a goal of how much you want to save on a monthly basis and put that much away so it's not spent on discretionary spending.
--- End quote ---
I put it away away. It's in a separate account at a separate bank in a fairly inconvenient location. No debit card. I'm not even sure where I put the checkbook. No way of transferring money out electronically. It's local, but the only way to get the cash in or out is to drive over during office hours, so I rarely make a withdrawal.
--- End quote ---
This thread is on the fringe of becoming a 12-step, self-help group.....
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