One of the first things we were told when we arrived was that credit card theft and fraud was a serious problem here and pretty much no matter where you go, you’re information can be stolen. We didn’t know whether to take this information seriously or if it was a bit inflated. They said, don’t go to any gas station off base or someone will drive up after you fill up and take your card information right from the pump- apparently your card is stored in the machine for a few minutes after completing the purchase. They said do not ever go to the mall, someone standing next to you can steal your information right from their pocket. Then with the whole Target information scandal back in November, basically no matter where you go your information will be stolen. This all sounded a bit exaggerated to me, until my credit card was stolen this weekend.
I have to say how incredibly impressed I am by Chase’s Fraud Services. How they could even catch it is beyond me- it was a fairly insignificant attempt, so I was surprised that they were able to stop it. Well, now my account has been frozen until a new card comes (hopefully next week). So, my husband and I have decided that at least for now we are going to transition to a cash only lifestyle.
The first thing I did in order to figure out how much cash I would need was to go through our credit card statements and bank statements to see how much we spent on gas, groceries, bills, eating out, and other miscellaneous spending. I put every transaction for the past 2 months into each of those categories and added them up. Once I had the totals I decided where I might want to cut back on spending. We are trying to eat out less and I am trying to shop less. So, once I had my adjusted numbers I went to the bank to take that total amount out in cash.
I decided the best way for us to do the cash only lifestyle was to budget the amount of cash we should need for the whole month, take out that amount from our bank, and put that cash into envelopes, divided up by the categories I set up while adding up my budget. So every time one of us takes money out from any of those envelopes we will replace it with a receipt. Since this is our first month, it may need some adjusting. So if we go over, we go over. But this way it will keep us credit card free (mostly) for a little while and help us be more budget conscious.
Now, I am not saying we are going to stick to this forever, nor do I think that cash only is a good idea forever. Frankly, you need to have and maintain good credit for things like mortgage interest rates and car loan rates, etc. This is something we have decided to do for a while, possibly just while we are living here. Now I am also no financial expert, this is just the path we have decided to take. My husband and I have always been very good about paying off credit cards in full every month and not spending more than we make- but I do think a cash only (or cash mostly) lifestyle could be temporarily beneficial to anyone struggling with credit card debt.
This month may be a bit of a struggle for me, as I have given myself a much smaller spending budget for clothes, beauty products, home good, etc. So we’ll see how it goes!