Cash Really Is King
Our family started our Total Money Makeover journey in November, 2007. The one thing that we first learned about was that paying for cash for as many things as possible was the way to go. This was, of course, a new way of thinking. After all, we had our debit card, which was "essentially" cash, right? Well, after much praying and hard work, we have ceased using credit altogether, rarely use our debit card and are now true believers in Cash is King!
We recently had the chance to put this mantra to the absolute test -- making a major purchase. We had many questions such as, will they "let" me pay with cash (some stores will not for certain electronics) and could it really save us money? We also wondered if paying with cash would help us not deal with a case of buyer's remorse, as we had felt so many times in years past when making purchases. We would soon learn the answers to our questions, but let's go back to where this first began......
One Saturday morning in July, 2008, I woke up with my daughter as usual and proceeded to turn on the television so she could catch up on the latest episode of Dora (or whichever show was her favorite on that particular day). I pressed the power button on the remote control - but nothing happened. So, I thought that maybe some how the power strip had been tripped off. When I checked, I noticed our other electronics were still plugged in and still had power, so I immediately ruled that out as the culprit. As it turns out, our house had been struck by lightning the night before. We determined this as our cause when we found both alarm clocks in our children's rooms also were not working.
In true Dave Ramsey fashion, we knew that we couldn't run out and buy a new one on a credit card. Not only because we shouldn't, but also because we no longer owned a credit card. We took a look at our emergency fund and quickly determined that a television in the family room really didn't constitute an emergency. So, what did we do? We marched down the steps to our basement and carried up a replacement television -- a 14 year old, 25" tube TV. This replaced our larger 32", for what we thought should be a relatively short period of time.
As we proceeded to work our way out of debt, a need for a television fell lower and lower on our desires list. I think it stemmed from us learning about what was important in life, and honestly, how important was a TV. It certainly was not a necessity. It was a want. A desire. So, that lead us to wait.
Earlier this year, we attained our goal of becoming DEBT FREE! Yes, we eradicated over $37,000 in debt in 27 months. That meant that it was time to start working on our emergency fund. We also felt that we wanted to reward ourselves for our hard work. So, what did we do? No - we didn't run out and by a TV. We started saving. Here's where it got fun.
The way we saved was in true couponer's fashion. We had budgeted a set amount of money for our grocery budget every two weeks. We decided that rather than use the money left at the end of our two week budget period to go towards building the emergency fund (which, we know it really should have), we started to save it. We had a garage sale and added our proceeds to our stash. Imagine our surprise when, in less than 6 months, we had reached our goal of having enough cash to purchase not only our televisions, but also a new TV stand.
Now, when you save like we do, you end up with a "wad-o-ones" in your savings. We counted it all up and headed to the bank to get some larger bills to actually pay for the items. After all, I don't think that the cashier would have appreciated having to count over 200 - 1 dollar bills to pay for our purchase (imagine a 5 year old dumping her piggy bank on the counter to buy a lollipop).
After getting our cash, we headed to the store. We knew EXACTLY which television we wanted - the LG 42" 120Hz, 1080p model. We selected both our TV and stand and were armed and ready to fight to the death for a reduced price. OK, so maybe not till the death, but we were ready to barter. We ask the salesman what could they do since we were paying in cash and he said he'd check with his manager. I was ready to argue my way to at least a 5% cash discount. Imagine my surprise when he walked up with that EXACT offer - 5% discount for cash. We had the same response for our TV stand as well - 5% discount.
With great pride, we handed over our cash. It felt so good. I felt empowered, like I had done something that few had done before me. Sure, many can afford a TV and write a check or pay off their credit card. But, I had never, in my adult life, made a purchase of this magnitude with cold - hard - cash.
I was quickly able to answer all of the nagging questions I had. Yes, I could pay cash for my item without any questions. Yes, we were actually able to save money. And the most important question of all -- did we have buyer's remorse? Not one iota. Don't be afraid to pay with cash and don't be afraid to ask for a discount. You never know what will happen unless you try. For us, it