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. I really don’t know how applicable this is to younger people. I grew up without ever using cash so I have no emotional attachment to the amount of cash I have on hand. Instead my emotion comes from the numbers of my account going down. In fact, I kind of feel like cash is an extra, a bonus since it isn’t accounted for in my digital balance. Because it’s a bonus, I’m much more inclined to spend it. Especially with small amounts of money, I almost feel obligated to get rid of it at a convenience store or something

  2. I started using a credit card around 5 months ago and I haven’t lost any money, but I have made 40$ for free

  3. Dave is wrong about grocery stores not accepting debit cards 25 years ago. Here in Michigan, we have a chain called Meijer. Getting bigger every year. But in the 90s, they had their own store debit card called the Meijer 1 check card. My grandmother used it instead of cash or writing checks.

  4. cash made you died on street, your home can broke into, your car window will be smashed.. you will be rob at the corner..

    alittle bit extra charge but you can live longer and no need to worried with Robbery during my sleep

  5. tbh id rather use cash… hate checking my bank and seeing it go down, muich rather get rid of some notes in my wallet

  6. This was so on point 👏🏽👏🏽 I gave a waitress a cash tip the other day. I didn’t leave it on the table I walked up to her and handed her £5. She was so surprised!

  7. Hmm, I wonder if there is a generational gap here.

    Younger people who are in tune with their online banking etc. vs Older people who check their balance less often.

    I spend less using card than cash.

  8. James 2:6  (KJV)

    6 But ye have despised the poor. Do not rich men oppress you, and draw you before the judgment seats?

  9. So what does it mean if I feel the complete opposite? When I have cash I just want to get it out of my pockets. Legit every dollar that turns to cents is basically gone. I hate carrying change and bills are disgusting, Also it cuts like a knife Everytime I hear the lightsaber swing of despair that is my bank balance notification. Also also servers like cash because it's untaxed income. Love your show. I've seen a lot of them. Thank you for sharing the knowledge.

  10. I feel like this is more a generational thing, I’m 20 and I use my debit card for mostly everything, but I consistently check my balance and feel every dollar I spend. Interesting information regardless

  11. I’m about to start taking out cash for everything now because I do feel it when I’m using cash because swiping a debit card is painless and easy

  12. SO WHAT ABOUT WHEN THEY MAKE IT CASHLESS WHICH THEY ARE DOING AND NO WHERE ACCEPT CASH, WHAT DO WE DO THEN????

  13. Really profound. I'm a recovering spender. I'm teaching my kids your proven strategies. God bless you, Mr. Dave Ramsey.

  14. 25 years ago? thats crazy, you could pay with plastic 35 years ago most places where i live. And 20 years ago you wouldn't be able to find a place that accepted a cheque. We do like our debitcards here, but i understand how its kind of "too easy" especially if you are a younger person learning to deal with money.

  15. Question: will my girlfriend then be happier/more grateful to see the money actually leaving my hands? (when I'm paying for her, or both of us)

  16. I buy something (ex: coffee) using my debit card and get cash like $20. I’ll budget that $20 for my lunch for at least a week. That way I’m all sticked up with my budget.

  17. My wife and i got our credit card debt under control with a cash only budget. Im so glad when we were done with that. It would hurt to buy gas for the car. That was 5 years ago and we've been able to stay out of credit card debt.

  18. Women usually have the least amount of self control , that explains the enormous of personal debt they have.
    Just sayin

  19. I wish I had waited on Dave Ramsey on my waitressing days, would make up for the other people that won't tip enough because "we don't agree with the tipping system". I'm just trying to make a living, don't punish me for a messed up system. Or don't dine in, take it to go.

  20. I guess it depends on how disciplined a person is. Using credit cards with discipline and not carrying a balance works well. I understand that plastic makes it easier to spend, but the same can be said of debit cards. It really boils down to discipline.

  21. With cash or card (debit-, I also learned the hard way about credit), I still check what's in the bank and wallet before ordering. Gotta leave some for the bank's service fees end of the month.

  22. Hi folks. I've translated the captions to portuguese. It now needs some review or approval, if anyone can helo. I want to share it with people near me, as I found this very eye-opening. Congratulations for the channel and cheers from Brazil.

  23. I use cash for 95% of everything… I carry $2000 at all times, and $7000 in my home at all times along with 10000 in gold and silver bars and coins. If things go sideways I'll be able to barter for goods. I do have a substantial amount in savings at my credit union… but you gotta use cash always!

  24. Thank you, this is so true!! I'm a fitness instructor and as soon as I started taking credit cards, people would easily give me $800 for 10 sessions. I couldn't believe it!! $800!! Like it was nothing. But had I asked for cash that would never happen. Very insightful.

  25. The cash back is really nice when spending normal essential items and services such as phone bill's, trash, water, electricity bill, groceries, gasoline, internet, car insurance, registration, etc. I get hundreds of dollars back each year. Also it's more dangerous to use a cash/debit card over a credit because you can not dispute a fraudulent charge or scam whereas with a credit card, you can dispute and get it reversed. Just something to consider. I know it's hard for some people to not spend crazy. But it's just a tool. Lock it up with someone you trust and use it only to pay for your essential. If you are the type that can't control spendings, then I totally agree with Dave Ramsey and good luck everyone. Nothing wrong with using cash only either.

  26. I think this is the one piece of advice that is generation based here’s why because all of the problems when it comes to cards (from what I observed in life- I’m only 22) I feel like is with the older generations whose primary way of spending is from cash. For instance my parents (who are about to retire) always had a huge problem with credit cards/ plastic. They were constantly over spending and maxing out all of their cards. I have 5 credit cards and only use my debit card for when I buy things. I believe the older generations have a problem with using plastic because most of them aren’t as tech savvy as the younger generations. For instance my parents still use a checkbook and a ledger to keep track of their spending. I use my banks mobile app to force updates to me after every purchase- no matter how small, send me balance updates everyday-and after every purchase, and tell me when my balances are approaching and below a certain amount I set. All of these updates get sent through text, push notifications, and my email. So for example with just a $5 purchase from the car wash my phone is going off the rails screaming at me not to spend anymore because of a $5 purchase which I feel if I used cash I’d be like it’s just $5 who cares.

  27. I have evidence to prove your hypothesis. 2 days ago, i went to the mall to shop for a winter jacket. On my way in walking, i stumbled onto a one hundred dollar bill crumpled on the pavement. No one was nearby to claim it. It was so new and beautiful with its hologram blue watermark. I hadn't handled cash, especially a benjamin ..in years. That thing is now in a safe in my bedroom. Together with a 50 euro bill i had left over from a vacation in italy 5 years ago. Together with a 10 dollar bill from a past denomination i have kept as a souvenior..which i have held on for at least a decade. Its hard letting cash go. Very true. Let me add that all my plastic, save for my debt card, stays in that safe. I am now considering withdrawing 120 dollars every week for personal needs. Am excited about this new venture. By the way, i will be getting a jacket from walmart for 80 dollars less.

  28. I dont know, for me, when i use the debit card, i am tallying what i have in the checking account. I do sense and feel the subtle difference when I use cash though….

  29. I act differently, I stopped using cash now I saved more money because I have to see the num eres on my banking app go Down

  30. It's true, I recently had several thousand in cash on hand. It looked good and felt good. Instead of leaving the cash lay around I took it to my bank to deposit the cash. It was like saying goodbye but all I was doing was placing it into my account. The number in my account wasn't the same as the tactile experience.

  31. I own a Valet company in south Florida and I have noticed more young people don’t carry cash as much, l do have money apps for them but I try not to encourage it. I would say most people that come to the place of business carry cash , but when they do use the app they tip more🙄

  32. I'm considering switching to cash for awhile to reset. However using cash scares me. I don't shop sales just when I can, so there's the worry that there isn't enough to cover the cart or the fill up, the worry that someone will steal it – I had a coworker steal my cash rent payment before, and then I've gotten into a few dangerous situations trying to give panhandlers a handout. I prefer that I don't have anything on hand for my own safety. ^^;

  33. This is so true Dave!! As a waitress I mainly have cash on me, and it makes it a lot easier to NOT spend. I refuse to pay for anything other than bills with my debit card, anything I purchase for myself is done with CASH. It makes it so much more difficult to spend when you have to see the cash physically leave your wallet. I feel if other people followed this way of spending they would spend a LOT less.

  34. Unfortunately, You don't even need a budget if you pay everything with a debt/credit card, because your wealth is carried in your pocket . . .wow! Eye opening Dave!

  35. I always thought "plastic" is better because I could see all of my transactions and where my money goes to. Guess I was wrong

  36. You know, when I first started listening to Dave I thought he was wrong on credit cards, but I think hes slowly converting me. I use the card for stuff I buy normally, pay it off every month, and I cash in the reward points.

    I think I might try doing like I do normally (using credit card 99% of the time) for a month and using cash for a month and compare notes when I look at my budget.

  37. No wonder I end up becoming stricter with cash while traveling abroad. I should start applying this more at home- cash only.

  38. I could see myself over spending with a credit card if I could remember the vending machines take cards, good thing I’m old school

  39. 1:48 It never hurt me. It fact, cash burns a hole in my pocket. (Your problem is that you're too absolutist, seemingly not being able to comprehend that some people can react differently from you. What stops me from spending is slipping back into my old ways.)
    3:59 I exchanged bits of my bank balance (also registered in a spreadsheet showing how much I have left until EOM) for that "stuff".

  40. I carry a limited amount of cash now. You spend more when you carry Plastic. I leave my Debit cards home. It works for me. I eat at work so I don't have to pack a lunch. I only spend on Transportation and Carpool to save as much as I can. It works for me

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