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Living on a Cash Basis

What does that even mean?


It means “If you don’t have the money in your checking account to buy it, don’t buy it”.

The companies that sell products spend billions of dollars each year convincing you that you can have whatever you want, and that you can have it right now. They make it sound so good and so easy to make it yours, but there’s a catch.

  • That car you want comes with a 7 year loan.

  • That new HDTV comes with interest when you put it on your VISA.

  • New living room furniture was “90 days, same as cash” - only it’s not the same.

In spite of what these companies would like us to believe, it is a much better idea for us to buy the things we have the money to buy.


The concept of living on a cash basis is simple enough, but execution can be a bit difficult. So here are some tips:

1. Practice gratitude. If you have lived for years purchasing things you want when you want them by signing up for a payment plan, living on a cash basis may be difficult. At first you may feel as though you are making significant sacrifices. That’s exactly what the credit companies and car dealers want you to think. Instead of focusing on the material items you are choosing not to purchase for now, focus on all the other wonderful things in your life.

2. Ditch the credit cards. They are just too convenient. Cut them up, freeze them in a cup of water or lock them in a safe, but quit carrying them. If you must have the convenience of plastic use a debit card instead. What’s the difference? You ask. Debit cards only work if you have money in your checking account. When you run out of money the card stops working.

3. Use a single checking account for all expenses. That means get rid of Paypal, Venmo or any other forms of payment you use. This leaves you with just three ways you spend money:

Cash: the green paper is still a great option. People spend less when they use it,

Debit Card: For some things, the convenience of a debit card is appropriate.

ACH/AutoPay: Your bills such as rent, and utilities may be set up for automatic draft from your checking account. It is best to limit this kind of payment to bills that are not optional.

4. Save for big purchases. In spite of what car dealers would like you to believe, you can buy a car for cash. It’s true – you probably won’t be able to buy a car with your pocket money. So, save a little every month until you can buy the car. The first time you do it you may have to buy something older than you are used to.


Living on a cash basis is freeing. No payments means you are free to make life decisions you might not otherwise be able to make. You can save money you used to pay to VISA for a trip. Maybe you will be free to pursue a different job, or even start your own small business.


Make the change today – I promise it is a better way to live.

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