Money Makes the World ‘Round

The holiday season is finally officially over and I’m guessing your January credit card statements have just arrived in the mail.  I know mine has. 

But I’ll bet my credit card statement has a heck of a lot fewer charges on it than your’s does. 

And you know why? 

Cash. 

Good old-fashioned, cold-currency cash.

If you are long retired, newly retired or thinking about retiring – let me re-introduce you to the concept of paying with cash.

We baby boomers were the first generation to be introduced to the concept of credit cards.  Easy and immediate credit to buy whatever we wanted, whenever we wanted it.  And as long as we paid the minimum amount due on the monthly statement, there was no limit to the amount of potential credit we had access to.

Virtually from childhood, we have been bombarded with advertising, magazines, style and home improvement television shows, etc., etc., etc. telling us the best and most beautiful ways to exercise all that credit the banks were pushing on us.

And now, at the dawn of the 21^st century, we don’t even have to go to the time and trouble of actually fishing those credit cards out of our wallets. We can just wave our expensive cell phones in the general vicinity of a chip and pin machine and everything from a cup of coffee to a slightly-used car and even the down payment on a house can be had on credit, no questions asked.

Well, I’m here to tell you that as a retiree, the cashless society is not your friend. 

In fact, by the time you actually retire, you should no longer be on speaking terms with your credit cards.

If y’all remember, I suggested that you start seriously looking at your finances at least five years prior to your actual retirement date.  You need to figure out exactly how much money you are spending on a monthly basis.  That means your mortgage payment or rent, all monthly utilities, home and auto insurance, transit, gas and auto maintenance, groceries and spending money, debt repayment and banking fees, cell phones and internet, pets, etc., etc.

Basically, you have to figure out where every last penny you are earning is going.

Then you use this information to put together a monthly, retirement budget. 

So starting today, you are going to re-introduce yourself to the concept of paying with cash. 

Look at the pretty colours of the various bills, memorize the dollar amounts on each bill, get the feel of the plasticized paper, be mesmerized by the holograms.

And learn the hard, cold lesson that when you’ve used up all your monthly allotment of currency on something ridiclous like an expensive lunch or a new pair of shoes – you are essentially broke. 

Once you’re out of cash, you have to wait for the next pension cheque to drop into the bank to get some more. 

You don’t get to use your credit card for a tankful of gas.  You don’t get to go the ATM and withdraw “only” forty bucks.  You don’t get to go to the movies with your friends.

It’s a b**** of a lesson.  And the lesson is – learn to live on a budget!

Now that you are retired, you should always, always, always be using cash for:

Groceries

Transit tickets and passes

Gas for the car, as well as your driver’s license renewal, yearly sticker, and bi-annual emission testing

Movie admissions

All lunches and dinners

Trade show, exhibition and amusement park admissions

Clothing and shoes

All personal care items, including make-up and hair salon appointments

All beverages of a social nature purchased at the liquor or beer store

Pet food and toys

…. basically, once you are retired, you should be paying cash for absolutely everything.  If you are using credit to pay for anything listed above, you aren’t doing the budget thing correctly. You need to revisit your monthly budget and make some realistic adjustments.

Because of all of the easy credit we have had access to all of our adult lives, we baby boomers are also the first generation attempting to retire while at the same time, carrying record amounts of personal debt. 

So when you eventually do retire, you need to become extra conscious of exactly how much you are spending in relation to the size of your pension cheque so as not to increase that debt load.

And one of the best ways to monitor your spending habits and overall personal debt, retired or not, is to pay with cash whenever possible.

Hey, I watch re-run episodes of “’Til Debt Do Us Part”!