As of late, though, I’ve revised my stance on the credit card. It’s not worth it. No, I didn’t acquire massive amounts of consumer debt. And no, I haven’t had any problems with American Express. They’ve always treated me well. (They even waived a $40 late fee for me once.) But I have decided that the card is actually more trouble than it’s worth.

Card Benefits Barely Matter

Sure, the 1% cash back, or whatever your card offers, seems nice. Why not get some free money, right? Okay, but it’s really not that much money. Let’s say you get 1% cash back from your credit card. Let’s also say you put $2000 per month on the card. At the end of the year, you will have gotten $240 back. Sure, it’s 240 dollars, and that’s nice, but that means you charged $24,000 that year. Should you really be charging $24,000 to your credit card in one year? If $240 really makes a significant difference in your finances, then no, you shouldn’t. If $240 makes a big difference to you in the grand scheme of things, you need to stop charging and learn to save.

If I spent every single take-home dollar through my credit card (an impossibility), and got 1% cash back, then at the end of the year, I’d get less than 0.6% of my gross pay as cash back. Um, wow. Now I can afford that vacation to Aruba, if Aruba is a cheap hotel in a bad neighborhood.

That’s the way the math works out, though. There’s simply no way to spend enough on a card to have the cash back (or other benefits) really matter. The percentage just isn’t high enough. It doesn’t matter how much you spend, you’ll still be getting only a small fraction back. Yes, a little free money is nice, but is it really enough that you should be letting it sway your decisions?

Let’s look at it one other way. A pack of gum costs about a dollar. If you saw that pack of gum for 99 cents instead of a dollar, would you get excited? No? Maybe you find a new plasma TV you like. It costs 1700 dollars, but you find it on sale for $1683. Excited yet? No? Damn, you’re hard to please. If you don’t get excited when retailers offer you a 1% discount, why do you get excited when AmEx does?

Using a credit card for the cash back is like withdrawing cash from one credit card and transferring the balance to a new card with a low introductory rate, just so you draw a tiny bit of interest on the balance for a few months. Yes, people do that, too, but it’s still stupid. The payoff just isn’t worth the hassle.

Living Month to Next Month

Credit cards also encourage living month to month. Even if you pay off your credit card every single month, you can easily find yourself behind. It’s simple to deceive yourself about the real state of your finances when you rely on credit.

Up until recently, I was using my credit card for virtually everything. I paid my bill, in full, every single month. That makes it okay, right? Well, no. I realized a few months ago that I was basically living on my next month’s income. I wasn’t destroying my savings yet, but slight overspending was building up, and it had gotten to the point where I didn’t have enough in my monthly expenses account to cover the total current balance and still pay the rest of my bills for the month. I had let the credit card hide my debt. Because I was paying it off monthly, I was convinced I wasn’t overspending, but I was. I was living almost a month ahead of my income.

In theory, a closely monitored budget should avoid this problem. At best, though, adding an ability to hide debt will add extra burden to your budgeting effort. At worst, it will hide issues that will sneak up and bite you later.

The Alternatives

So, I’m giving up the credit card. What does that leave? Three things.

1. Cash
2. Checks
3. Debit Cards

I use checks for the same things I always used checks for. Rent, car payments, other bills. I use cash for food and discretionary spending. I use the debit card for everything else. In particular, I use the debit card for fuel. Paying for gas with cash is a pain, and paying with a check is even worse, so the debit card is the only way I plan to pay for gas.

Having the debit card handy means that I have the same emergency support that I get from the a credit card. i.e., I can always pay for a ride home if I break down. Using the debit card also means that I never have debt build up on me unexpectedly.

It’s certainly possible to use a credit card and still maintain a budget. It is not, however, possible for the credit card rewards to be “worth it”, when they are worth so little. Do what you think is best for your finances, but don’t let yourself imagine that the small rewards have much value. As for me, I’ve chosen simpler finances over a couple hundred extra dollars every year. The easier budgeting, combined with the peace of mind I get from knowing exactly how much money I have is worth far more than 1% cash back.

1. Identify your desires.

   Take the time to sit down and decide what it is that you want. Your desire can be short term, as in a beach trip this summer, or long term, as in a millionaire retirement.

   Do you desire Money? A successful relationship? More community involvement? A big screen television? Decide what the things you desire are. If you are unable to identify the things you want desires, you will not acquire them. Identify your desires so that you can obtain them.

2. Visualize what you desire.

   No, I haven’t accepted a sponsorship deal with the producers of The Secret. Visualization isn’t a fix-all, but it is a useful tool. It is, first and foremost, a motivational tool.

   Really think about what you want. Clear any mental distractions away and develop an accurate, clear image of what you desire. Develop this image as fully as possible, because it’s going to guide you.

   Now, hold onto that image. If, and when, you run into frustrations, problems, and barriers, you can call back your visualization. You can recall your image to remind yourself what you are working for. Use your visualization as a source of motivation. Build an image that will motivate you.

3. Set goals and record them.

   You decided what you want in step one, and you established a clear mental image in step two. Now is the time to develop accurate written goals. Find a way to put your desire into words. If you cannot put your vision and your desires into written form, they are not well-formed. Revisit steps one and two.

   Writing down your goals forces you to be more exact about what it is you want, and the record of your goals can provide motivation later. Just as you can return to your mental image when the path becomes hard, you can re-read your goals when you need additional inspiration or personal clarification. Write down your goals to clarify them and provide motivation.

4. Break your goals into achievable pieces.

   This is the single hardest part of goal-setting. It’s easy enough to say you want to retire a millionaire. It’s much more difficult to really set down the steps to reach that goal. The individual pieces should be achievable goals in their own rights.

   If your goal requires saving money, then you need to build a budget, and pursue a higher-income job if necessary. If your goal is to improve your health, set yourself a realistic diet and exercise regimen. If your relationship needs mending, decide what’s wrong with your relationship and set aside the resources and time needed to mend the broken parts. If you are unsure what your goal requires, your goal may need to be specified more exactly.

   If any piece of your goal seems too large, break it down further. Treat each piece as a new goal if necessary, going through these eight steps with the smaller goal. Turn your goals into small steps.

5. Eliminate distractions.

   Eliminate the annoyances that hinder your chances of reaching your goals. If your goal is to lose weight, and you’ve got snacks around the house, throw them away. They are a distraction from your goal. You don’t need them around making your goal more difficult. Make throwing away the snacks your first action.

   If you are trying to reduce your debt, and you have a friend who always wants to eat out at the most expensive restaurants, you need to resolve this. It is a serious obstacle to achieving your goal. You don’t have to eliminate the friend, but you need to eliminate the problem. Tell him that you can’t afford to be eating out so expensively. If he’s really a friend, he’ll understand, and you’ll have a distraction eliminated, either way.

   It’s not always easy to remove distractions. It’s not even always possible. In the cases where it is possible, do it. Do what it takes to eliminate as many distractions as you can. The road to a goal is hard enough without unnecessary blockades. Remove the things which distract you from your goals.

6. Push through problems.

   There will always be problems when trying you reach your goals. Some problems will be big, while others will be bigger. You need to push your way through these problems. You built a strong visualization for a reason. There was a purpose to writing down your goals. When you run into an obstacle that’s more than just a distraction, call up your visualization, re-read your written goals. Use these as fuel to push yourself over, around, or through the obstacle. Problems will arise, but you can overcome them. Remember, your goal is on the other side of that obstacle.

   If you are looking for your dream job, and you’ve already gotten ten rejections, pull your visualization up, and ask yourself, “Is this setback big enough to stop me from reaching my goal, big enough to stop me from getting the job I want, that I deserve?” If you want it, really want it, the answer will be, “Absolutely not.”

   Hold onto the image of what you want, and keep plugging away, striving toward your goal, until you reach it. Remind yourself that even though it’s hard work, it’s going to pay off in spades when you achieve your goal. Push through the obstacles to reach your goal.

7. Work hard toward your goals.

   You don’t just need to work hard. You need to work your ass off. This is the most important step in achieving your goals, and it’s also the most difficult. You can have all the best intentions in the world, but if you don’t put in the work, you will never meet your goals. The likelihood of achieving your goal is directly related to the about of work you put in.

   Find the time and resources to achieve your goals. Push yourself to reach your goals, one step at a time. You are responsible for putting the effort in to achieve your goals. No one else will, or can, put the time in for you.

   If you want to get in shape, you have to diet. You have to keep your dates with the treadmill. No one else can get you into shape. If you want to get out of debt, you have to build a budget, and you have to stick with it. It’s you who has to give up the non-vital expenses, and it’s you who has to live within your means. You have to put in the time, and you have to put in the effort.

   Recall your goals and your visualization. Re-read your written goals. Remember what you are working for when the road seems too long. When you slack off, your goals will move further away, but when you really put the work in, you will see your goals coming closer and closer, until they are finally within your grasp. Work hard and eventually your goals will arrive.

8. Re-evaluate your goals.

   Periodically rethink your goals as you progress. It’s okay to change your goals. Sometimes we outgrow a goal. Other times our goal priorities change. If you find that your initial goals no longer meet your current desires, adjust your goals accordingly. Rethink your vision, rewrite your goals, and adjust the steps as necessary. It’s not important that your goals stay constant, only that you are constantly working toward your goals.

   Likewise, if you find that the steps you are taking are not bringing you closer to your goals, or not bringing you closer as fast as you expected, you should reconsider the steps you chose. It may be that you simply need to be patient and continue to work hard, or it may be that the steps you chose are not optimal. Just as your goals need not be set in stone, the steps to your goals can be pliable. Adjust them where necessary to choose the correct path.

   Nothing is set in stone. You chose your goals, and you may likewise choose to change them. Re-evaluate as needed, and don’t be afraid to change your goals. Remember, your goals should fulfill your desires. If they no longer do that, they need to change. If your goals no longer reflect your desires, adjust your goals.

None of these tips are earth-shattering or new. They are instead quite practical and time-tested. They may not always be easy, but they work. Apply them in your life, and with time and hard work, you can bring your goals within reach.

If you view the law of attraction as nothing more than a motivational tool, then this post isn’t for you. It is a good motivational tool, and I don’t dispute that. This post is for the people who think the law of attraction has some kind of special power, and invoke silly arguments to try to defend it.

1. Belief in the Paranormal/Supernatural.

   Believing that the law of attraction is more than just a motivational tool, that it actually has some power to control the universe, requires a belief in the supernatural. To believe that wanting, or wishing for, or concentrating on a goal will cause an increase in the chances of that goal occurring requires a belief in the supernatural. To believe that thought alone has the ability to change events requires a belief in psychic powers.

   That’s exactly what psychic powers are: controlling events with thoughts. If you can actually control events with your mind, then the law of attraction will make you money, because James Randi will give you a million dollars.

2. Anecdotal Evidence.

   The fact that some people who have made lots of money claim to use the law of attraction doesn’t mean that the law of attraction has any effect. Can you say placebo effect?

   Some people claim that keeping a rabbits foot brings them good luck. Some people think that breaking a mirror will bring bad luck. Nonsense. There’s no scientific evidence that good luck charms have anything more than a placebo effect. Likewise, there’s no evidence that the law of attraction is anything but a placebo.

   There are plenty of people who are wealthy who don’t claim that the law of attraction made them their money. There are also lots of people who are not wealthy who blindly cling to the law of attraction in a desperate attempt to change things.

   In the words of Steve Pavlina, “I often hear people complain that they’ve dutifully and correctly applied the Law of Attraction, but their intentions just aren’t manifesting.” Of course, it’s because they aren’t putting enough energy into it. Just like faith healers tell people it’s a lack of belief that stops them from walking.

3. Unreliable Sources.

   It seems that many of the people who claim to have made fortunes using the law of attractions are the very same people selling books and movies about the law of attraction. It seems to be a conflict of interest when the people telling you the law of attraction works are the same people selling the law of attraction.

   The drug companies always think you need their latest pill, and every car maker will tell you that their models are the best in the business. They are, of course, biased. Without independent validation, these kinds of claims should be treated with serious skepticism. (Even with independent validation, a healthy dose of skepticism is always a good idea.)

4. Blaming Victims.

   Picture this: You’re driving along the road late at night, listening to the radio. You’re on your way home from dinner at a friend’s house. Your favorite song is on the radio, and you’ve got a smile on you face. Every so often, a car passes you heading the other direction. Suddenly some drunk asshole swerves over into your lane, plowing into your car head-on.

   Now tell me, who do you blame for that accident? Is it your fault? Did you attract that accident? The Secret specifically says that people do attract the car accidents they are in.

   I have nothing else to say about this.

5. Quantum Physics.

   The Secret makes mention of quantum physics, as did a commenter on the last post. Let’s be clear about this: quantum physics doesn’t affirm the law of attraction or any other claims about the supernatural.

   Yes, quantum physics states that the act of observation can affect quantum particles. That does not mean that observation can control quantum particles. They still behave in a nondeterministic manner. i.e. They act randomly. Their behavior follows statistical rules, just like coin tosses.

   If you can demonstrate that your thoughts can control the outcome of quantum-level events, I’m pretty sure you would win a Nobel prize. It would be, by far, the biggest discovery in quantum mechanics.

6. The Cast.

   Much of the cast was made of up people who’ve made their fortunes selling this “secret,” and few of them have any credentials that were impressive to anyone willing to do any critical thinking. Among the cast, we’ve got some philosophers, a feng shui consultant, a metaphysicist, and a visionary. Yes, a visionary.

   Philosophers – Philosophy is a degree in sitting around, thinking deep thoughts. That’s fine, but it doesn’t qualify you to make outrageous claims about “the most powerful law in the universe.” I used to think logic was part of philosophy, but I guess not.

   Feng shui consultant – What is it about charging obscene fees for arranging furniture that qualifies this person to give advice about wealth? The formula for wealth she used was:

   1. Make up claims of understanding old, hokey Chinese belief about Qi.
   2. Charge lots of money to move furniture around.

   Metaphysicist – This is just another way of saying philosopher. Strangely enough, the philosophers and the metaphysicist seem to have written lots of books about wealth, and not so many about the nature of life, intelligence, the universe, or anything else that traditionally falls into the realm of philosophy.

   Visionary – Seriously, his job title was listed as “Visionary.” This doesn’t even mean anything. It’s a self-appointed title that’s as meaningless as “guru,” and somehow even more self-indulgent.

If you want to buy into The Secret and the law of attraction, that’s your right. If you want to avoid critical thinking and hold onto ridiculous claims, you can. But the law of attraction is bunk, and you’re wasting your time and money.

This “secret” has been kept from you your entire life. World leaders have suppressed it since the dawn of civilization. They have used it, even abused it, while the ignorant masses grind their way through their lives. And if you spend $29.95 on the DVD, the secret will change your life.

So, what’s the secret that’s been suppressed for ages and ages? The Law of Attraction, the idea that you will draw toward you the things that you think about most. Basically, if you concentrate on positives, you’ll attract good fortune, while if you concentrate on your Visa bill, your Mastercard bill will show up, too.

Never mind that The Secret claims it’s been known, used, and taught by everyone from Plato to Einstein. Never mind that it’s been in every new age self-improvement book ever written. And never mind that some of the people in the video have been hawking it to gullible schlubs since well before I was born. It’s a secret, and you need to watch this movie to find out about it.

The Problem with The Secret and the Law of Attraction

I’m all for giving people good advice. Unfortunately, The Secret isn’t giving good advice. The law of attraction isn’t really advice at all. It’s a get-rich-quick scheme, a 30-pounds-in-30-days diet. The law of attraction sells the idea that good thoughts, instead of hard work, will bring good things.

Easy sells. It’s sexy. Losing thirty pounds without dieting sounds great. Earning six figures part time sounds great. The idea that just thinking good thoughts could change your life sounds absolutely wonderful. Hard work doesn’t sound so great. In fact, it sounds kind of hard. However, hard work has the best chance of yielding the best results. Selling easy paths that don’t work distracts people from the real path that could actually help them.

Telling people that cutting out trans-fats will cause them to lose weight distracts them from the fact that eating less will cause them to lose weight. Telling people that they can earn six figures by flipping houses distracts them from the fact that good investments and budgeting will build wealth. Publishing a video claiming that good thoughts are the catalyst for improving one’s life distracts people from the fact that hard work is the only reliable catalyst for improvement.

The Truth in the Law of Attraction

I’m willing to grant that there’s a little bit of truth to the law of attraction. If you concentrate on improving your life, while your neighbor concentrates on how much his life sucks, you probably stand a better chance of improving than your neighbor, if only because you’re more likely to see the opportunities and take the risks that can help you out.

There’s no magic, though, and no law. It’s about you trying to better yourself. Big surprise. Trying to do something increases the chances of succeeding at doing something.

I’m sure that The Secret’s cast would use this to defend themselves, saying that it’s good thoughts and hard work that really accomplish improvements. Sleezy infomercials pitching ab exercisers do the same thing when they briefly mention “proper diet” when claiming weight loss. Real estate scams print “results not typical” in tiny letters when discussing all the millionare success stories. A scam is a scam, even if you aren’t technically lying. Ab infomercials aren’t selling proper diet, real estate flipping programs aren’t selling personal bankruptcy, and The Secret isn’t selling hard work.

The Lies in the Law of Attraction

Since concentrating on negative issues is a surefire way to attract more of them, according to The Secret, your best bet to get out of debt is to simply not worry about it. Imagine having more money, and keep spending the way you’ve been spending. Somehow by imagining you’ve got money, you eventually will. Budgets are for chumps! That money you want will show up eventually. Either that or the debt collectors. But don’t think about that. That would attract problems.

If the law of attraction really worked the way The Secret says it does, then your best bet for improving your financial fortune would be to buy lottery tickets and think really, really hard about winning. Let me know how that works out for you.

The Insanity of The Secret

The Secret says that the people who have debt, heath problems, etc. are attracting their problems. Likewise, people with wealth are attracting prosperity. As evidence for this, The Secret cites the fact that people with debt and health problems talk more about these things than people without them, while prosperous people talk more about their wealth. This clearly shows that thinking (and talking) about debt attracts more debt, while thinking about wealth attracts more wealth.

First off, most of the wealthy people I know don’t talk about their wealth much. Second, isn’t it possible that people get problems and then talk about them? Doesn’t that seem to fit Occam’s Razor pretty well? I don’t talk about my lung cancer very much, but if I actually had lung cancer, I might.

Joe Vitale, a “metaphysicist” who appears in The Secret, tells us that people who get into car accidents do so because they were thinking about them too much, that they attracted car accidents. In my experience, the people who get into the most car accidents are not thinking about the possibility of accidents, or anything else to do with driving.

What about the people who get struck by lightning? Are they the ones thinking about it the most? When I think about getting hit by lighting, I get off the damned golf course.

A Case Study

The Secret tells the story of a gay man who had a terrible job with coworkers who treated him like crap, who was constantly physically assaulted by gay-haters, and who was heckled by homophobes when he did stand-up. By concentrating on his problems, he was causing them to magnify. When he learned about the law of attraction, he changed what he was concentrating on. By just concentrating on the good life he wanted, the mean coworkers quit their jobs, the gay-haters stopped assaulting him, and suddenly he was a riot on-stage and the hecklers were gone.

Are we seriously supposed to believe that good thoughts made others quit their jobs? That good thoughts stopped constant physical attacks and turned audiences full of homophobic hecklers into gay-embracing, supportive audiences delivering standing ovations? Are you kidding me?

Burglary victoms, don’t invest in better locks and an alarm system. That’s just concentrating on the problem. What you should do is concentrate on what you want. You know, a house that hasn’t been broken into, and a stereo that hasn’t been stolen.

Rape victoms, it’s your fault. If you were thinking good thoughts, those rapists wouldn’t have attacked you and violated you in ways you never thought possible. Now, go clean up and think about something positive, because if you keep thinking about the rape, it’s going to happen again. Mr.Vitale says so.

Why Even Care About The Secret?

Why do I have such a problem with the secret? Because it’s taking advantage of gullible people. It’s a slick sales pitch targeting the unfortunate. Sadly, people like Oprah and Ellen DeGeneres are helping them, instead of promoting people who actually have useful advice.

Promoting a false hope, a lie, about what it takes to improve ones life simply exacerbates the problem. Every person who spends more time hoping for extra money spends less time actually budgeting. Encouraging people to hope and think about change, rather than working for change, digs them deeper into the holes they are in.

It’s the right of every slimy guru to sell artificial hopes and dreams to fools, just as it’s the right of gullible people to buy that snake oil. That doesn’t mean we should say its acceptable.

A Solution that Doesn’t Rely on Hope

The truth is that improving your situation is usually possible, but it’s usually not easy. If you want to get out of debt, you need to build a budget and plan. Thinking about more money isn’t going to help. Actually getting a second job to earn more money will help. Hard work will always triumph over good wishes.

You don’t have to work hard if you don’t want to. You can take the false hopes. You can think really hard about improving your situation, instead of actually trying, and working, to improve your situation. But while you’re feeling upbeat about how eventually all your “hard thoughts” are going to pay off, your neighbor is actually getting a second job. In a few years, he’ll have whittled his debt down, while you’ve continued to rack up more credit card bills. In the meantime, the makers of The Secret will have made a pretty penny off your indulgence and gullibility.

My “Scientific” Experiment

In the name of fairness, I’m going to try the law of attraction for myself. If it works, I’ll rewrite this post to say that the law of attraction is scientific fact, and I’ll buy copies of The Secret for all my friends and family. I’m going to think about something I really want, and I’ll really hope it materializes. I’m going to hope like I’ve never hoped before.

However, if my thoughts can really control reality, then everyone involved with The Secret, you’d better stay off the streets, because what I’m thinking about, what I’m really, really hoping for, is that each of you gets crushed by a runaway garbage truck.

(See also: The Top 6 Reasons Why the Law of Attraction (and “The Secret”) is Bunk)

Best Comment

Sosuke Says:
February 20th, 2007 at 3:43 pm

“The Secret”, when combined with hard work and good exercise will make all your dreams come true!

*Hard work not typical of those who purchase “The Secret”

Why not just stop? Instead of writing down every expense, or saving every receipt, or always paying cash, why not stop trying so hard to keep up with all our expenses? What happens if we stop watching our expenses constantly? So, we overdraft a bit. So what? So we find ourselves forced to dip into emergency savings regularly. Who cares? Maybe we go into a bit of consumer debt. Is that really so bad?

Okay, that really is bad, but it doesn’t have to be like that. Why? Because someone else is already watching your expenses for you. Your bank is watching every time you buy a CD with your debit card. Visa is watching when you charge that new stereo system. They are already keeping up with every transaction you make, so you don’t have to. If you put everything on a card, you’ll already have records of your transactions.

So, just charge everything and hope it works out at the end of the month, huh? Well, not exactly. I charge or debit pretty much everything I can. However, every few days, I sit down at my computer and tally up how much I owe American Express, and how much is left in my checking account. I always have a very good idea about exactly how much money is available to me. I don’t keep my receipts, and I definitely don’t try to pay cash. My cards track my expenses for me. All I have to do is tally them up and divide my expenses into the right categories for my budget. It takes no more time to tally this way than if I were tracking via receipts, and I don’t have to carry a wallet full of worthless paper.

This isn’t for everyone. There are some people who simply cannot trust themselves with a card, and if that’s you, I understand. Pay cash.

But if you can be responsible with a card, there’s no reason to put yourself through unnecessary hassle. You can do this with a debit card or a credit card. It really doesn’t matter. You need to spend a little bit of time every so often making sure your expenses match your budget (they do line up, right?), but that’s all. So save yourself the trouble of keeping a fistful of receipts, and the danger of carrying large amounts of cash. Let Mr. Mastercard and Mr. Chase watch your expenses for you.

(Okay, so the title isn’t completely accurate, but “Track Your Money without Obsessing Over Every Single Purchase, Every Single Day” just didn’t have the same ring.)

The Good
Unlike only paying in cash, I feel that writing down every expense is somewhat reasonable. The benefits are obvious. Since you’re writing down every expense, every single penny that you spend is accounted for, whether you are paying with cash, credit, check, or debit. There’s no question of where your money is going, and if you also keep a running expense total, you should be able to state, at any moment, how much money you have available.

The Bad (or at least The Bothersome)
However, I feel that writing down every expense is also less than optimal. Let’s face it, writing down every single expense is inconvenient. You have to constantly carry a pad of paper and a pen. If you already do this, then writing down every expense might not be such a problem. However, I’ve never managed to follow this rule for more than a few weeks. It’s just too much trouble. I never carry a pen or paper, and don’t want to. I feel my pockets are crowded enough.

The Other
A slight variation on this theme is to keep every receipt. The basic idea is the same, and so are most of the benefits. However, saving receipts allows you to avoid the need to carry a pen and paper. Unfortunately, saving receipts has a tendency to thicken the wallet, and not in a good way. Some weeks, I barely spend anything, and during those weeks, savings receipts is easy. Other weeks, I have tons of purchases, and carrying a dozen receipts becomes tedious. The wallet I carry is tiny, and barely has room for what’s already in it. Stuffing twenty reciepts inside doesn’t exactly serve to lighten the load.

To be honest, there’s no extremely compelling reason not to save receipts or to write down expenses. Doing either of those things carries some obvious benefits, and the drawbacks aren’t nearly as severe as only carrying cash. It’s just not the most convenient thing to do. Next time, I’ll explain what I do instead, which I think carries most of the benefits of saving receipts, but without all the hassle.

Much of what I’ve read about tracking expenses falls into one of two categories: Always pay cash or Write down every expense. Today I’ll just give my thoughts about cash, leaving the rest for later.

Does it hurt more to pay cash?
The idea behind always paying cash is that it hurts to hand someone else your money, and therefore, you’ll spend less. I agree that it hurts to hand someone money, but it doesn’t matter much whether it’s paper or plastic. If I’m going to have to stub my toe, I don’t really care whether I stub it on the door or the table. It hurts the same either way. If spending paper money hurts more, it’s only because we are more accustomed to credit and debit, so paying large sums of cash has become unfamiliar. If we paid cash all the time, handing cash to strangers would quickly become familiar.

The other premise of always paying cash is that if you don’t have the money, you won’t spend it. This is a particularly poor argument. Keeping track of my finances means I already know how much I have, whether it’s in the bank or in my wallet. I can choose not to spend the money if I don’t have it, regardless of the payment method in question.

Is it safe?
Refusing to pay with anything but cash seems to carry some intrinsic danger, as well. It implies that you will not be carrying any kind of card. If you were carrying a card, you’d be in the same situation as if you were carrying no cash. If you have the willpower to not use a card when you run out of cash, then you should also have the ability to summon the willpower to not overspend with a card at all. The cash argument is moot. And if you are not going to be carrying a card, you’re either going to have to start carrying more cash, or you’re going to be in a potentially serious problem if you run into any kind of unexpected situation.

Let’s say you go to the movies one night and come back to find that your car has died. What are you going to do if you don’t have any more cash on hand? Tow truck and cab drivers don’t generally accept kind wishes as payment, and your bank isn’t exactly likely to be open late at night. If you aren’t carrying a card, you can’t even go to an ATM.

It’s true that you can get along without ever carrying a card. People did it for most of human history. It is not, however, the most convenient way to live, and the slacker in me is always looking for the simplest way.

Can’t you just carry larger amounts of cash?
You could also just carry large amounts of cash, but I don’t care for that. Have you ever dropped a bill only to realize it when someone handed it back to you, or maybe after someone didn’t hand it back to you? Why increase the chances of that happening on a regular basis? Waving around a wallet full of green when you pay for your latte also makes you a better target than even the guy wearing two thousand dollars worth of chains. Stealing your wallet is easier than stealing someone’s necklace, and avoids the entire trip to the pawn shop.

Besides, if you’re carrying large amounts of cash, you’re no better off than just carrying a card, as far as overspending goes. I find that I am terrible about not spending the money in my wallet. Friends have told me they have the same problem. I’ll nickel and dime myself to death if I carry large amounts of cash. I’m going to buy that DVD, and eat lunch out, and I’m going to buy those gummy bears, too, because I’ve got the money right here. Any money in my wallet is by definition spending money, so I’m going to spend it.

I see no practical way to get away from carrying a card, whether credit or debit. Refusing to carry a card is going to put you in jeopardy if you run out of cash and find yourself in a situation where you need more money. Carrying large amounts of cash carries risks of its own. Carrying a card is by far the simplest way to avoid both of these issues. Pay cash if you really want, but carry a card. Always paying with the card might very well simplify your life, but I’ll talk about that later.