As the holiday approaches, the idea of rushing into stores immediately after Thanksgiving can be a great experience with cash payments. It is around this time that people will try to get some more Christmas shopping done before the gift giving starts and looking for ways to save up or at least manage their funds better will always be a big help.
Cash payment can change the way you use money especially if you adopt it long term and with almost all major life decisions you make, you always start with one step and it can be the holiday season for those who wants to convert to cash payments. As most people would say when they want to run a marathon, put one foot in front of the other and the next thing you know, you’re running.
It is a major life decision to use cash for the majority of your purchases because credit cards have already penetrated the financial world down to household consumer level. It is being used for just about any purchase you can think of from groceries to gas and even a car. Credit cards is as part of a consumer’s life as money itself.
As the holiday season approaches, shopping for gifts will catapult its way into the top of your budget and to-do list and this might be a good way to start making cash payments. The National Retail Federation website shares that there are consumers who have already started buying for the holidays. The percentage of consumers shopping by early November jumped to 56.6% from 54.4% last year.
Advantages of cash payments for holiday shopping
Creditcards.com shared that majority of the card purchases for consumers goes to clothes at 67%. Imagine how this statistic would go down if people would use cash to pay for their purchases. Here are are some of the advantages people would immediately notice when they pay with cash.
- You are forced to budget. If you carry cash when buying holiday gifts, you may not notice that budgeting is a little bit easier because you are forced to do it. There is no way around it and going over budget can mean a long walk home or even not enough money for food. You need to stay within the amount that you allotted for the holiday shopping because you cannot just swipe for any excess amount in your bill.
- You get to stick to your list. A lot of people know that making a list before doing any shopping is critical and they are actually pretty good with it. But another challenge to this aspect is sticking to the list when it comes to actually buying and checking out the items. Making cash payments helps you with this dilemma because you have to follow the list or else you run the risk of missing out on some gifts for some people.
- No interest rate payment. Most consumers are putting in a lot of effort in finding the right credit card interest rate that they are most comfortable with. This is computed by lenders based primarily on the applicant’s credit score. But one benefit of making cash payments is that the consumer does not have to worry about interest on their purchases. Although some may disagree because people can also lose potential interest earnings but at the end of the day, it is better to have little money without being in debt rather than having a lot of items but buried in debt.
- No fees and other charges. This is another thing that would make any consumer want to drop their credit cards because missing payments automatically results to multiple penalties and fees added onto the succeeding statement. Paying with cash helps consumers from having to go through all this stress because there are no interest rates and penalties to think of.
- You end the year debt free. Using cash payments to get your holiday spending done can also help you achieve being debt free as the new year starts. Or at the very least, not add to what you are already making payments on. This is important as you endeavour to get better with financial management. It is best to improve on your finances by either lowering down your debt amount or paying them off entirely.
Preparing your finances for cash payment
Now that you have an idea the benefits of making cash payments for your holiday purchases, here are a few tips to help you prepare and go about it.
- Start with a list. It is important when doing some holiday shopping to always start with a list. Just like how you would prepare for grocery shopping – you list down what you plan to buy. Shopping for gifts follow the same concept – you need to list down for whom the gifts are and how much you are willing to spend per person. This guides your buying behaviour and you need to carry this list with you at all times.
- Look at how much you can spend for the holidays. And not how much you want to spend per person because if you do it he other way around, you run the risk of not having enough budget for the people at the bottom of your list. Make sure to assign an amount per person and see what it totals up to. If you need to make adjustments, tweak your budget per person and not just the total amount.
- Set aside the funds you need in a separate account. It is best that you put the money in a separate account so you can compartmentalize your expenses. You do not use it to pay for other expenses just as you do not use the money meant to pay for the lights to buy gifts.
- It would be safer to bring a mix of debit card and cash. ChicagoTribune.com quoted aWal-Mart executive when he referred to the credit card use this coming holidays as “anarchy.” This is because the new chip cards needs to be dipped for a few seconds rather than swiping the card which is what consumers has been used to all these years. It might help to bring cash when you are planning to use your card to help make payments a little faster.
The holidays is already a few days away with Thanksgiving done and Christmas just around the corner. Most of the purchases would have been done with the Black Friday sale shopping but there are still a lot of days left for shopping. You need to be smart and know how you can best pay for all your holiday shopping for the last few days of the year.
Cash is king and remains to be one of the best ways to pay for your purchases during the last few days of the year. It helps you stay away from debt and gives you a better start for the coming new year. It forces you to budget your money and makes you think long and hard before bringing an item into the checkout counter.
Cash payments is a great financial strategy consumers can use to end the year on a high note and start a new one on the right footing. If it is something they can do all throughout the year, the results would be phenomenal. It can be a big challenge at first but once they get used to it, they will get better in budgeting their finances.