How Cash Changes The Way You Look At Money – Dave Ramsey Rant

How Cash Changes The Way You Look At Money – Dave Ramsey Rant

Chase is on Twitter, can you explain to me? How using only cash is beneficial? Well, I don’t use only cash I use I pay things over the internet all the time, and I use a debit card obviously for that and I use a debit card at the gas pump and A few other places here there, here’s the thing Money is weird There’s it it activates portions of the brain let me give you an example okay in the internet world Including it Ramsey solutions when we put something on a website The harder it is for you to buy something the less likely you are to buy it. You won’t follow through on the transaction It’s called friction in the internet world If you got to stand in line at a store Some people just put the thing down and walk out of the store. That’s friction The harder it is to buy something the less you buy That’s thing one you need to remember now. There is such a thing as emotional friction Now what I mean by that is this in your mind right now or physically if you want to I’m gonna do it Take your wallet out if you have one. This is my wallet. I have a money clip I carry in my front pocket with hundred-dollar bills, so there’s a hundred dollar bill, right? Lay that $100 bill in front of you with Uncle Benjamin Franklin’s eyes piercing into your soul Okay put beside that Your debit card right? Put your debit card decided or your credit card beside it now. There’s a couple things that happen when you spend the cash It hurts It creates emotional friction it activates the pain centers of the brain actually MIT did a study with MRIs and They were studying consumer behavior, and when the consumer spends cash It activates the pain centers of the brain when you make the exact same transaction with plastic You do not it does not activate the pain centers of the brain you don’t feel it and so you spend more When you spend with plastic than you do with cash Tons of studies showing this the average purchase is 12 to 18 percent more that you will spend In a fast-food setting using plastic you will spend 70% more in a vending machine in the hotel lobby You will spend a hundred and seventy percent more Double triple the transactions When you use plastic yeah, I’ll take chips and a coke and a candy bar, right But when you’re actually putting these you have to feed that dollar and that thing right You actually feel that and you spend way less So all of that is is emotional friction You need to be aware of that the other thing that happens is this think about this. Here’s what’s interesting Yeah, when you were a kid If you’re if you’re an old guy like me you might have traded marbles with your friend Yeah, marble, and you trade something you were trade something with someone you give them something they give you something There’s an exchange You hand them something they hand you something see that’s what happens when you pay with cash you hand them green presidents faces They give you the item Think about what happens with plastic You give them a piece of plastic They give you your plastic back And they give you the item Isn’t it subtle that there was no exchange that occurred You didn’t make a trade you got your plastic back and the item Because you would never leave the transaction without your own credit card or your own debit card with you, right Well think about how subtle that is visually and how that activates the brain So all of that to say that when you spend cash you’re more aware of your spending Here’s an example you got to eat When you’re paying cash, and you lay a hundred-dollar bill in that little black tray Uncle Ben’s coffin You know it’s his coffin cuz he ain’t coming back You just killed the old boy off. He’s gone, right? Yeah, black tray goes away. You don’t ever see Uncle Ben again. He’s gone Benjamin Franklin is out of here But when you send that plastic bout guess what comes back the plastic and you have a tendency to spend more on Alcohol more on desserts and pick up the other person’s tab at the restaurant when you are paying with plastic Then when you’re paying with cash This is why McDonald’s was the first one all these years ago in the fast-food business to start taking plastic one hours when I first started this show 25 years ago nobody took plastic at all in fast food and They didn’t take it the grocery store either you wrote a check or you paid cash and fast foods 25 years ago or You pay cash you wrote a check or you paid cash and because it was scary to people to think that people might actually run up debt buying groceries or Run up debt buying food at a fast food place, but McDonald’s changed all of that And it wasn’t long after McDonald’s did us. They did a big study on behavior and And they found that you spend 78 percent more you know I’ll supersize that I’ll put fries with that and I’ll pay for his two and give me the apple pie When it’s on plastic when it’s cash it’s like dollar menu, baby Changes everything When you spend with cash it Changes the transaction now all of that is important to think about it think about stuff like Apple pay with your phone See that’s even worse Because you’re not even handing them a form of payment. You’re just waving a wand your phone You’re like freaking Harry Potter buying stuff here. You just waved a wand and got free stuff That’s Apple pay even less emotional friction Different methodologies would pay the less emotional friction. There is the more you’re gonna spend now our none of this is evil It’s not like that’s the mark of the beast. I’m not saying anything like that But what I am saying is is if you’re gonna get control of your money you have to understand What is being done to you by these companies? They are managing your behavior, so When you spend cash it changes your behavior Function so especially when someone first starts doing a budget and trying to get out of debt and work the baby steps I’ll put you on a bunch of cash at that point a bunch of cash I Still tip with cash like a valet or Always leave some cash on the bed as I leave the room and a hotel for the maid because those maids work hard man You know or if you’re gonna tip you tip with cash because you know what you get you get this response like wow? But if you just include it on your bill nobody even sees it nobody feels it I want the server to be honored by the trend by the tip Think about how that works and it’ll change the way you look at cash cash is an important part of your financial turnaround

100 thoughts on “How Cash Changes The Way You Look At Money – Dave Ramsey Rant”

  1. This doesnt happen to me. and im not bullshiting myself. I hate using cash becuase i lose all the change and coins. Credit card way better. i keep my spending in check, and i collect points. I have a free flight now with life expenses i would of had with cash or not.

  2. My children are just 3 and 4 and I'm already planning how to teach them about smart money decisions from saving to investing to buying whole sell selling fir a profit, teach them things I wish I was taught when I was little and do things for them I wish my mom would've done for us.

  3. This is awesome! I am watching this 11.37 pm going into the new year 2020 and this is one resolution I am going to keep to myself!

  4. Credit card companies plan on owning the world and the people if they can get rid of cash some things you have to have plastic but pay it off at the end of the month to avoid the socialism prosecution in the future and today

  5. I use cash at every opportunity. My "debit" card is a Walmart reloadable card. Yes there are unavoidable fees involved, but I waste far less money doing things the way I do them. I used to blow thru money so easily, because I never actually saw my money. Between direct deposit from my job and debit cards from my bank, I had no clue how much I was wasting.

    Today, my bank account is in my safe at home. My paycheck is mailed to me every week. I get that warm, wonderful feeling every time the lady puts the Benjamin's in my hand. Like Dave here, I fold my cash over top of my plastic cards I carry. No clip required. My cash is readily available to see, touch and count. I mainly use the Walmart card for automatic bill payments and the occasional eBay purchase. I never, EVER use it at a point-of-sale, i.e. the check-out register. Cash only, at the store. Because of this arrangement, I've got a lot more cash, on hand, than I ever had before. I love it. The interest rates at the bank is such a joke, it's a better argument to keep your cash on hand, than to have it eaten away by fees and service charges at a bank.

  6. But you can't increase your credit score from cash… you should use cash to pay off your credit card and NEVER use a debit card!!

  7. What about the extra credit card insurance you get buy paying on credit card. Especially with electrical items that are designed to fail quickly.

  8. Not for some of my African peoples though, that plastic always feels like pulling out our entire bank account and handing it to someone or a computer to take a chunk, hence a lot of us tend to look angry wherever doing so! Lol

  9. I did side gig once and got paid £500, so ten £50 notes, and you're right it does hurt when you're paying cash! I went back to my wallet and was like, "I'm down to 7 £50's! 😭"

  10. I really needed to here this. I want to be good with money, but I simply don’t know how. I’m debt free, I have family land that’s not being used, and a beautiful home that I get to live in rent free. I’m going to college to be a technician and I don’t have any kids and I’m dating the woman tugs shared David Ramsey’s you tube with me and plan to marry. I am so excited to learn how to invest and have money to give back!

  11. Great video! I figured this out years ago and it makes me spend a lot less money just going to the bank once a week for cash and only using debit for gas or specific purchases that are above my carry around cash level. I also go out less because I know I don't have a lot of cash left for this week for example. It's making a difference of hundreds of dollars a month staying in my bank account.

  12. Best way to give money away is to use your Credit Cards..yup those interest fees add up fast and it's every month.

  13. 02:00 — Hmm, not me.

    I feel pain upon looking at an amount. I visibly react to it. Sometimes I give a funny look or talk about to the person with me or the cashier. I feel pain upon seeing amounts. That's been ingrained in me and I wish I knew where it came from. But upon taking money out of the ATM or from the bank teller, that is the moment of my pain. The realization that this money is being burned away. Sometimes seeing the amount makes me regret, and sometimes makes me actually reconsider if my mind is clear.

    Some people, if not several, look at cash as already spent. So when I spend cash amount, it doesn't do anything for me. I remember trying to make a series of purchases on models for a game a year into my first job. I spent $600 in one day. I grabbed two $300 clumps of money because the first $300 wasn't enough. No pain at all (actually I was quite excited and overjoyed throughout the whole ordeal).

    This is my strategy with salespeople who make money by commission of the sale. I create the friction. I take up as much of their time as I can, to make them grind away and give up and lower the standard. If you don't let a car salesman walk all over you, and you force him to get you past the first brand new Kia Forte and the "you've been approved for this amount" garbage and make him work, eventually they'll get so desperate they'll give you a car to make you go away so to speak.

    Ask questions. Fight the amount. What fees are you tacking on? The sale price said A and B, why is it Z? This is a bargaining culture you see in many Asians, Indians, and Middle Easterners. They see an amount and they're culturally trained to fight it and question it, and they're famous for their frugality.

  14. I look at my debit card as cash being its linked to my checking account. To my kids embarrassment I am very,,,,, frugal with it. Cc's on the other hand stay in the wallet only too show their face in case of emergency.

  15. One big thing for me between plastic and cash is that with plastic you have all the money in your account in your disposal where as with cash, you only have the amount you are carrying. It helped me a lot to save money, when I moved money from my primary bank account to my descender account, leaving on my primary account only under 1000 $, so that I could actually feel the effect of every purchase, so that I was like "I don't even have 1000 $ in my account – now is not the time to spend money." I was kind of freaking out about it all the time, even when I had over 50 000 $ on my secondary account XD
    It worked – I just had a rule with myself that I can't touch the money on my secondary account, for petty mundane things. The money on my secondary account was buying a house.

  16. I think now we're at the point (at least in California) there's pretty much no place that doesn't take card. Thanks to things like Square even pop up businesses can accept card now.

  17. Cut up my Chase card yesterday. Now I’m working on unlinking it from all of my autopay bills and services. Services that I’m quickly finding that I don’t need to survive…goodbye Hulu account I literally never used.
    Cut the cord.

  18. Quick question dave. Now if spending cash causes emotional distress, why would anyone ever give it away?? Isnt that the goal tho? Not trying to be funny im seriously needing to kno this. I kbo it causes distress bc nobody ever gives it away.

  19. I feel EXACTLY the same pain when using credit cards as I do when paying cash. Apparently your "studies" ignored me and people over age three

  20. If you are not responsible with your money, then using cash is better so you can get more control of your spending. If you have good spending habits, then use credit as much as possible.

  21. This guy is a fraud I just read his profile Wikipedia the only reason he has got started in real estate it because he has some family friends in banking which helped him get the money to start flipping houses without that he would not have the money he's a fuking fraud. He didnt go out there and saved or work hard for the money. It was handed to him.

  22. I pay with my credit card almost everything. I always pay the same day and subtract from my budget. I have gotten almost 2k in the year and a half that Ive been using Chase and have not paid them $1 in interest rates 💪🏼

  23. Credit is also less chance for loss for business especially small businesses when employees are low wage workers with no investment in the company

  24. Let me tell you something: God made celery not salary. A person says: I need some celery. A person who has it, gives it. You can eat celery. You cannot eat salary.

  25. My dad listened to your talk show on the radio for years and it drove me nuts to listen to your voice when I was only a child. I'm now 24 years old and wish I had listened way back then. I'm in debt, have low income and I am ready to be debt free

  26. This is so true. I tested it out before. I took all my money out my account after every paycheck and I racked up money so fast

  27. I'm the exact opposite. I normally do everything on card and know I have to watch what I spend. If I happen to have cash in my wallet its because it isn't for anything specific and I can free spend it on whatever I want.

  28. Is beneficial because you pay it out. It is spent on the item and you get the item. That's it. With credit you buy the item and take it home but you wait to pay. If you buy more items that way and wait to pay later you got the items but you pay twice as much later. Keep that up and the amount of money you spent is twice the amount you normally would pay. By carrying a balance you owe more than twice the amount you "spent". When you have to pay for what you spend and you pay half the price you still have the other portion to pay until you max your credit and have to pay it all off. You have the purchased items but have to spend twice as much money to pay for them and this makes your cash flow less. When you choose to pay cash for everything with no flow then you're upset because you want to have money to spend but most of it now goes into paying your debts. Pay cash and skip the regrets.

  29. All year I’m cash free!! IM ready get out of debt. Because I dont want to start My Career with out of debt. Its so Funny because when I use My cash envelope people look at me like IM crazy because I use cash because some people are using a lot of credit card or debit card.

  30. Dear Dave; What about “Robberies”? Explain that one. Tis better to get robbed by giving them your plastic than your paper presidents.

  31. I'm prefer a debit card. To me it's simply about keeping track and being responsible with your spending. I always create a budget for the month factoring in gas food and fun. I also put savings aside first with a annual goal in mind. Thank you Dave Ramsey for all you do I've learned a lot!!! I feel pain with my debit card too lol

  32. I am the complete opposite.. I hate carrying cash and having change so I throw it around like it's nothing.. when I have extra money in my account I throw it into a savings account online which I can't touch once it's in there for 2 business days

  33. credit cards give your checking account a mode of safety too, you can handle the credit company if the card is compromised, if they get your debit information, they can wipe your checking account, just always pay the credit card off entirely

  34. I agree with this, I noticed also when paying with a credit card in your mind your transaction is complete (you don’t owe anything you payed and got your stuff) then you get your CC bill and have to pay that and for me it feels like I’m paying twice and that’s what hurts it’s a total mind game and for me it makes it hard to pay off the credit card after a spending spree since I already “paid” and got my stuff LOL seriously think about it for a minute especially if you have CC debt it’s the reason I’m getting out of CC debt and going to start using “cash” I.e. my debit card

  35. I look at cash differently.

    If I use cash I feel like I am losing money. I get cash back on all my purchases with my credit card and if I use credit, I think I just earned $X on that purchase. Of course I have the discipline to pay it off. I earned almost $1000 in 2019 and if I saved that much in a form Dave approved of, he would be celebrating my creative way of earning money. But of course his core audience has no discipline with money which is why his system works for those people.

  36. It hurts more when one use a atm machine with your atm cards. And it has a surcharge of the atm and a bank surcharge. Not bank related.

  37. Simon Sinek pointed out that money removes gratitude because it's a promise that someone else will do something for you in the future, rather than a trade of goods for goods (or service) there and then.

  38. For me it’s backwards, it hurts to see my bank account go down, it’s painful so I do it less, If I already have cash then I’m fine with spending it

  39. I watch those money make over shows where people get help from a financial advisor. One show in Canada the Lady FA gives the debtors jars with cash allocated for each type of expense. This helps retrain them on their spending. Why did I mention this? I have never seen that lady FA hand out jars with individual credit cards inside for each type of expense despite the credit card points and cash back they can potentially earn.

  40. I pay with credit about 90% of the time. Having $20,000 available credit doesn't mean you go and spend to the max. I am able to take advantage of the cash back offers to make sure I get something back for spending but only as much as what it is in my budget. I agree with Dave because most people don't have the discipline to control their spending. That's why it is very important to track EVERYTHING that you spend money on.

  41. I'm sorry, I'm not using my debit card over my credit. Someone steals my money, I wont get it back. Money gets stolen from the bank, they somehow can get it back immediately

  42. Omg! I love this video! It literally just opened my eyes 👀, how plastic is skewing our perception on spending. Great lecture, Dave! 👏

  43. i'm using cash just for an emergency because cash is too bulky to carry around and i'm not gonna put my wallet into my back pocket yeah i still carry them but not so much i prefer using plastic but when you're constantly check your bank account you'll get hurt too by how much you're spend well at least for me

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