Is Money Real To You?

by Ron Haynes

Today, people rarely see their money. Our paychecks are deposited directly into our checking account, we automatically transfer money into our investment or savings account, and we pay our mortgage and other bills online. We use debit or credit cards to buy gasoline, food, restaurant meals, or DVD’s. When the funds run low, we get an email alert and log on to transfer the appropriate amount to cover the next few days. We give gift cards instead of cash and receive bonuses from employers on plastic. We’re losing our connection money as a real commodity.

A billion here, a billion there, and pretty soon you’re talking about real money. –Everett Dirkson

Today, our government bandies about billions (even trillions) of dollars like they were nothing.

We’re losing our connection with real money.

In 1980, my family moved across town so my little brother and I could attend a private school. I remember one occasion when a friend from a wealthy family lost a five dollar bill. To me, five dollars was an immense sum (especially in 1980). His mother thought it was no big deal because that amount had no real meaning to her. Her husband, a prominent physician, probably earned more than that every minute of an 8 hour work day.

How can re regain our connection with money?

Here are 7 ways to reconnect with your money and make it real to you again.

1. Associate money with something tangible.
When’s the last time you paid for anything in potatoes or cattle or bookkeeping services? Yeah, me neither. Learn to associate your money goals with something else other than just cash. If your goal is to save an additional $50/month, you could equate that to brown-bagging your lunch about 5 times per month, giving up a night or two out on the town, or finally canceling that phone land line.

2. Hours for Dollars
Do you get paid what you’re worth? How many work hours does that daily latte cost you? Convert your spending into working and you’ll be better able to connect the dots between your money and reality.

3. Remember the Tradeoff
The real question is why are you doing this? What’s your motivation? If we can connect our personal money issues to our motivations, we’ll be better able to achieve our goals. Brown-bagging without a good reason won’t keep you motivated. The next time you’re out and that new electronic gizmo or new pair of shoes catches your eye, pause for a moment and rethink the trade-offs and WHY you’re saving money. When you understand why you need your savings cushion, you’ll probably end up putting the money into your savings account instead.

4. The Envelope System
Nothing can get you reconnected to your cash like using the old fashioned envelope system. Under the envelope system, you track your money each month by using envelopes and reconnects your budget from an on-paper concept to something you can literally grasp. Gather some blank envelopes. Label one envelope “rent” or “mortgage payment,” another “utilities” and another “food.” Create as many envelopes as your budget requires and fill them with the money you’ve budgeted for that item. Then, if you take money from food to pay rent, put an IOU in the food envelope so you know how much money you need to replace. Unless you pay that envelope back, the whole exercise becomes a shell game and falls apart.

5. Paper or Plastic?
People who use credit cards tend to spend from 12 to 50 percent more than when they use cash, according to various spending surveys. It makes sense to limit your use of credit cards as much as possible. If you’re in bad enough financial shape that you need credit cards to make it through the month, restrict their use to the absolute essentials. Even if you’re using the card for groceries, reconsider. Unless you pay off your balance in full at the end of the month, you’ll pay interest on that box of pasta long after it’s gone.

6. Go On A Cash Crash Diet
As an experiment, go the the ATM and withdraw all the cash you’ll need to meet your needs for the next week. Put the credit and even the debit cards away and test your ability to live on a “cash crash diet.” Make sure you consider eating out, gum, DVD rentals, gasoline, late night runs to the store for milk, and allowances for the kids. All week, carry a notebook and write down where and how you spent your cash. If you can make it one week, you’ve successfully reconnected to your money. If not, where did you go wrong?

7. What’s the Future?
Even at a ZERO percent interest rate, saving $50/month will be $3,000 in 5 years. Add some interest in the mix and you’ll earn more. So what will that extra vacation this year cost you in retirement savings 25 years down the road? Admittedly, this tactic doesn’t reconnect you with your money in a tangible sense, but it does make you pause a moment before spending that $50 bucks on a meal that will soon be forgotten.

Money is a limited resource but by reconnecting to it and converting it into something tangible, losing a five dollar bill actually means something.

About the author

Ron Haynes has written 988 articles on The Wisdom Journal.

The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a Human Resources and Management consultant, helping companies know how employees will behave in varying situations and what motivates them to action, assisting firms in identifying top talent, and coaching managers and employees on how to better communicate and make the workplace MUCH more enjoyable. If you'd like help in these areas, contact Ron using the contact form at the top of this page or at 870-761-7881.


Nicki at Domestic Cents

We don’t use credit cards but we use our debit cards constantly. It’s so easy, too easy, to whip out my debit card and swipe it for a few dollars here and there (especially now that the eye-rolling for $2 debit card purchases has died down).

Whenever I go shopping for clothing though, I carry cash. It’s tough for me to resist a good deal and seeing the cash I have left in my wallet really makes me second-think my purchases.

The Weakonomist

Let’s force the government to pay for everything in cash. $150 billion for AIG? Fine, but you must do so in bills no larger than $50.

I only kid of course but the idea is novel. The envelop system is the best way to fix problems on a small scale. I might give it a shot for march.


Hmmm… I dunno, maybe it’s just my generation, but I kind of feel that dollar bills are LESS real to me than using plastic. If I have cash in my pocket, there’s a sense in which it’s already spent. If I take $20 out of the ATM, at the end of the month all I know is that’s $20 gone in the “cash” pile – where did it go?

I actually wrote an article about this about a year ago:

I wonder if it’s more the “mixed medium” (cash for some things, credit/debit for others) that’s confusing us…

Greg / Wise Bread

When I made the conscious decision to stop adding to my credit card debt, and to start to reduce it, I made myself pay for everything in “cash” — basically, if there’s no money in the checking account, then no spending. I don’t do that anymore and regularly use plastic for convenience these days, but those 9-12 months of cash-only spending instilled a kind of internal counter of my “cash balance”. I’ll only spend (usually) when I know I can pay off the balance at the end of the month.


I so rarely use cash, that when I do see cash, I’m surprised since bills have undergone so many changes in recent years. I barely recognize them, and I certainly wouldn’t know if a bill was counterfeit.

I’m all about my debit card, and maybe that’s not such a good thing.

When it comes time to teach my child about money, I do think I’ll have him use cash since it’s more visual than just numbers in a bank account.

Mrs. Micah

I have a strange disconnect with cash because I never use it anymore. So it’s not that I don’t value it, but I look at it as money that is set aside for certain things (like toll money). It feel weird to pay my rent in cash. But the good thing is that I take numbers seriously, so I do feel the spending when I track it…especially since I’ve been tracking it every day this month.

Do You Dave Ramsey?

Fantastic article! As a society we are becoming decentized to everything… indecency on tv, rude behavior in public, debt, and our relationship with money… as everything has simply become another payment, we lose a connection with why we work until it’s too late and we’re trapped… more grist for the meal.

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