With inflation raising costs, paying in cash isn’t always best. But at the same time, no matter how desperate you may feel, it’s never smart to accrue large amounts of debt. Stressing over money either way isn’t the path to a happy life.
If you need a friendly reminder, here are a few things you should always buy with cash. From small purchases to large investments, everything counts in your financial journey. Let’s dive into our carefully curated list of items to be mindful of when spending.
1. Hobbies
Everyone needs a hobby, but going into debt to buy collectibles on eBay or pay for expensive pottery classes won’t do you any good. Instead of going all in on a hobby right away, try it out once or twice and see if you like it. If you have musical aspirations, borrow a guitar from a friend before you buy your own. You can also try a less expensive hobby, like gardening, hiking, or DIY.
2. Groceries
We can’t live without groceries; this is the food we consume and products we use daily. Grocery shopping often beats eating out every day and is more cost-effective. Still, groceries are not something you want to pay for with credit unless you can immediately pay off your bill. Modern grocery stores offer buy now, pay later options, but please avoid this at all costs. Unless it’s a true emergency, accruing debt will only haunt you in the future.
3. Dining Out
Even if you buy groceries, it’s not wrong to occasionally go out to eat at your favorite restaurant. However, this doesn’t mean you should eat at expensive restaurants or eat out all the time.
Some restaurants charge upward of $50+ for a meal, which may not even be as good as a traditional $25 meal you could make at home. If you eat out a lot, try to figure out why. Unless you’re taking out clients and recouping your money, eating out more than a few times monthly isn’t sustainable.
4. Gasoline
With rising costs, gas is more expensive, and you most likely need to drive somewhere. Still, paying for gas with a credit card—when you know you don’t have the money—isn’t smart. Are you constantly traveling far to visit family? Do you just enjoy driving on the weekends? Whatever the case may be, evaluate your spending to avoid accruing credit card debt to pay for gas, and keep your driving to what’s necessary.
5. Small Electronics
Whether it’s the latest phone or laptop, it’s hard not to want the latest tech. Many can recall when you could purchase a cell phone for $200 or less by renewing with your cell phone provider. Nowadays, expect to pay close to 20 times this amount.
Although many companies have lessened the burden for most customers by spreading the payments across their monthly bills, it doesn’t change the fact that you’re paying more than $1,000 for these devices. For most people who just need a basic phone, this is not worth accruing debt for.
6. Haircuts
Nowadays, it’s common to pay close to $50 for a men’s haircut. Popular salons may even charge more! Do this weekly, and you will easily have an expensive subscription. While advising people to cut their own hair is a bit far-fetched, consider going for a haircut once a month.
Women’s haircuts can be even more expensive and cost hundreds! No haircut, no matter who does it, is worth accruing debt for. Be smart and pay in cash, but also limit your spending.
7. Household Supplies
With many alternative options nowadays, such as purchasing cleaning supplies at a dollar store, there’s no excuse to accrue debt for household items. If you find yourself justifying why you need to purchase an expensive brand name, clarify the value. Don’t fall in love with a company’s marketing when you can purchase a similar product for close to $1.
8. Books
Some people may go into debt by justifying their expenses as a return on their investment. Think again. Books may not seem like a high-ticket item, but the cost adds up. Many people pay for audiobook subscriptions and rarely listen to them. Others like to create a personal library. Although this is a personal choice, consider borrowing books from your local library. Also, consider digital options, which tend to be cheaper.
9. Gifts
Christmas is the season where people most likely spend the most on gifts. But what is the true cost? Data tells us the average cost shoppers spend during the holidays hovers around $900. Many expect bonuses or feel comfortable accruing debt to pay for their gifts.
It’s more challenging to budget for these gifts a few months ahead of time, but your wallet will thank you. Ironically, you may even spend less money, considering it’s harder to spend $900 in cash than pay with credit.
10. Clothing and Accessories
Gary Vaynerchuk is a successful entrepreneur and a down-to-earth person. He’s also right when he talks about people being “soft” when purchasing a $6 coffee. Similar to coffee, fashion brands are notorious for great marketing. This translates to people paying $200 for a pair of jeans of similar quality to a pair that costs $25.
The truth is that if you’re paying for brand clothes consistently on your credit card, you’re most likely wasting your money. If you find yourself with a closet full of apparel and rarely wear all of it, consider changing your spending.
11. Public Transportation
Public transportation needs will vary depending on your location. For example, if you live in New York, you’re most likely taking the subway to work or to most places near you. On the contrary, if you live in the suburbs, you’re most likely driving. Public transportation is great, but it is smart to evaluate your spending here to cut down unnecessary expenses. For example, make use of the public subway instead of paying for rideshares.
12. Parking
If you live in or near a large city, you’re familiar with paying for public parking. Some places charge $5, while others charge close to $50! To make matters worse, even paying $50 for parking won’t guarantee valet. Do this often, and you’ll have yourself a potential problem. If you’re traveling to the city on the weekends, consider arriving early to find street parking or to budget for this expense in advance. Accruing debt for overpriced parking isn’t smart.
13. Fast Food
Remember the Dollar Menu at McDonald’s? Although McDonald’s still offers a discounted menu, consider limiting how often you eat fast food.
Part of the marketing strategy at McDonald’s is to lure you in with a $1 item, knowing you may find yourself also buying a drink and some fries. Eventually, what was supposed to be a cheap meal can end up costing you just as much as a regular meal or more! It’s easy to swipe your credit card while you’re on the go, but consider checking your bank statements to ensure you’re not accruing debt.
14. Coffee
There’s nothing wrong with needing your coffee every morning. It may be tempting to go to your local café daily, but these prices quickly rack up. To make matters worse, some places will prep your drink incorrectly, leaving you stuck with an overpriced drink that’s not tasty. Consider buying your coffee in bulk and budgeting for this expense ahead of time. No coffee is worth accruing debt for.
15. Flea Markets
Whether you’re thrifting to save extra cash or simply enjoying a bargain, consider paying for all your items in cash. Even if you think you can flip an item for double or triple the cost, this is only speculation.
Furthermore, you must anticipate waiting an average of two to four weeks before your items sell. By paying for items in cash, you’ll be mindful of your spending and more likely to negotiate costs with sellers.
16. Pet Supplies
Many of us can’t live without our pets. Although we want the best for our furry or non-furry companions, avoid paying for their necessities on your credit card. This will vary for everyone, but on average, we spend hundreds on our pets. If you don’t use a budget, consider making one for your personal expenses and your pet’s.
17. Gym Memberships
The start of the year is known for many things, one of them being New Year’s resolutions. If you go to the gym consistently, you’ll notice a spike in new people working out. However, this fizzles out after a few weeks. We all have good intentions when it comes to our health, but we can sometimes fall short.
If you’re paying for an expensive gym and rarely go, consider downgrading or cutting your membership altogether. It’s not wise to accrue debt for expensive gym memberships, and it’s even less smart not to go!
18. Vacations
Work hard, play hard, right? If you’re reading this article in your office or at home, you most likely work hard. It’s not easy to show up at a job every day, often sacrificing time with our loved ones. Yes, you and your family deserve a vacation, but not at the expense of accruing debt! Consider budgeting for a trip so you can eventually enjoy a nice vacation without the stress.
19. College Tuition
Most of us have a love–hate relationship with college. For one, it’s useful and necessary for everyone to have some sort of education. However, spending $50,000 or more to hopefully one day earn just as much to pay it off is fiscally irresponsible. Unless you or your kids qualify for scholarships or other aid, evaluate other options. Online courses have come a long way, and traditional college is no longer the only option.
Earn More to Pay for Everything in Cash
Finally, if you’re ambitious and have the entrepreneurial spirit, grab a camera, mic, or your keyboard, and get to work. The internet has created the opportunity for many to build successful brands that enable them to quit their jobs and live more enjoyable lives. Whether you work for an employer or for yourself, you should work in a fulfilling career. Otherwise, what’s all your hard work for in the end?