Cash or Check?
by Diane Conlinn
January 4, 2001
Learning to live without debt can sometimes involve actions, that may seem extreme to some. Some people need to take a moratorium from having a checking account, perhaps permanently. I realize that we all have been trained to think that everyone must have a checking account, but that isn't true. The truth is nearly all business transactions can be taken care of with cash.
But the reason, I suggest doing away with one's checking account, is for those that have a problem with bouncing checks and overdrawing their account. Causing excess charges of up to $100 a month in some case, and, not to mention, the damage to your reputation with the people you do business with.
I have lived without a checking account for 4 years now. To tell you the truth, it is now a choice on my part, though I could have a checking account now. I have my paycheck automatically deposited into a regular savings account. I am charged a $3.00 fee a month, and have an ATM card with which I can make unlimited withdrawals each month. I can also check my balance on line.
- The difference between a savings account and a checking account is that the balance you get is the real balance. In other words, if the bank says you have $154.23 in your account. That is the truth. You will not find that later you had only $24.57 in your account. I always know my balance.
- I cannot bounce a check. I buy my money orders for 29 cents each at a Stop n Go down the street.
- I paid my rent at my last apartment with money orders. My rent was about $1000 so I would enclose two money orders in an envelope, one for $500 and the other for the balance. I paid it on the first of the month. My rent was paid on time, and there was no waiting time for things to process.
- #4 I pay my bills by money order, and I have never had a problem with the companies losing the money order or not accepting it. There have been no returned money orders. It hasn't happened.
- The cost to me for using money orders and a savings account is approximately $15 a month. I think this is excellent value for my money. And that amount rarely varies.
- I keep my spending money in envelopes designated for the category. Grocery goes in grocery and Gas in Gas. At first, I had to give myself only enough money for that day, then that progressed to the week. I leave my ATM card at home. So, I don't have an urge to get money out of savings that is designated for something else.
Drawbacks--Yes, there are drawbacks. It takes more time to fill out money orders. I use a small notebook that I use to track all of my expenses to note the money order number and amount.
In order to speed up the process. I have made small address labels that I stick onto the money orders.
I keep the money order receipts in a small organizer that is divided by month and each month has each month's money orders inside.
These are also my proof of payment, and I keep all receipts related to money order purchases. Using this method, I have been able to get refunds when I was overcharged.
There is some risk I'll be robbed with a large amount of cash on me. Though, that has never happened to me. However, when I add up the amount of money I wasn't charged in overdraft charges, and the amount of money I haven't spent because I had a check book with me, I would say that I've saved more than the thousand dollars that I have had on me at any one time.
There are two other actions similar to this I've taken. I don't borrow library books, or videos. I buy my books and I buy my videos. Because I am notorious for not returning them, and then owing charges. It is really cheaper for me to buy a used book, or a video on sale than to rent them.
When I am finished, I either donate them to a library, or sell them back to
a place like Music Warehouse, or exchange the books at a used bookstore.
So, in the end my purchase cost the same or less than borrowing.
Do these means seem desperate? Maybe. But, it has worked for me, and given me tremendous peace of mind.