Comments on: The Mystery Cash Box and the Sunk Cost Fallacy

By: Frugal in the Fruitlands » Link Love: Emerging from MMO Haze Edition

Frugal in the Fruitlands » Link Love: Emerging from MMO Haze Edition — Fri, 18 Jul 2008 16:03:00 +0000

[...] Ten Tactics for Improving Your Luck at The Simple Dollar. I’m not sure I agree with #2, “keep a reasonable amount of cash on you at all times,” but I’ve already discussed why cash flows through my hands like water. [...]

By: Frugal in the Fruitlands » It Pays to Check Your Receipt: $20 Deli Meat Edition

Thu, 01 May 2008 15:30:12 +0000

[...] They gladly fixed the error and gave me a shiny new $20 bill back. My only regret is that I didn’t catch the error before Matt swiped his card, because cash, as I’ve discussed before, has a different psychological weight than plastic. [...]

By: Lise

Lise — Tue, 22 Apr 2008 14:35:31 +0000

Hi Lizz, and welcome. I think I left a comment on your blog before I even replied to your comment! Shame on me!

I’ve gone back and forth on the cash thing quite a few times myself. My husband has always been very anti-cash, and it took me a while to reconcile myself to this philosophy. It really took me seeing that money in my pocket was money I had already spent. Every now and then some piece of financial advice chides me for my plastic lifestyle and almost convinces me to touch and feel cash again, but I kind of feel it’s like having brownies in front of your face all the time – if it’s there, you’re going to eat (use) it.

I’m glad my post left an impact on you – I always like to hear that :)

By: Lizz

Lizz — Tue, 22 Apr 2008 12:42:40 +0000

My customers pay me in cash quite frequently. It gets set in a cubby hole in my desk while it’s waiting to be taken to the bank. (Checks get deposited more frequently, but I don’t always have checks.)

It’s SO easy to say, “well, the place we’re going charges a dollar for debit card use; I’ll just grab a couple of fives and save a dollar.”

Then when I’m counting up my money I find out that I “made” far less than I “should have”. I almost erase the memories of the “borrowing” and I struggle to be able to account for all of it.

We’ve been debating using a cashed-based system and your post has made me realize that perhaps that’s not the absolute best thing for us; hubby is the same way with cash.

By: Frugal in the Fruitlands » Five reasons to skip the gym membership

Frugal in the Fruitlands » Five reasons to skip the gym membership — Thu, 03 Apr 2008 16:06:54 +0000

[...] In retrospect, I realize that from the moment I walked in, they had me. They showed me the gym first, so I would see all the nice features. Then they put me in a position from which I could not politely extract myself. Their goal, of course, is to get you to buy right now. They know if they get you out of their sight, you’re not going to come back. They let me “get away” with the $10 fee with the logic that if I pay them $10 today, I’m likely to come back, thanks to our friend the sunk cost fallacy. [...]

By: Sunday Morning Link Love ~ Post Birthday Edition | I've Paid For This Twice Already...

Sun, 30 Mar 2008 15:45:45 +0000

[...] Frugal in the Fruitlands: The Mystery Cash Box and the Sunken Cost Fallacy [...]

By: Diana

Diana — Tue, 18 Mar 2008 20:11:43 +0000

I don’t usually use cash, unless going to something like a convention, but I do prefer to use a card for most things if only because I can keep track of everything on the statement. If I’m wondering “Whoa! Where did all the money go?” I can check the statement and say “A-ha! No more buying excessive amounts of X for me!”, whereas an entry saying “Withdrawal of $Y” tells me absolutely nothing.

However, I also don’t use credit cards- they scare me. Instead, I use my bank’s debit/credit card that takes money directly out of my account, since I’m terrified of accidentally spending myself into debt. Student loans, that kind of debt I’m ok with. Trying to get off a credit-card debt treadmill scares the pants off of me.

By: Chad

Chad — Tue, 18 Mar 2008 20:02:38 +0000

I too have to watch the cash bucket. I do know where a large part of it goes. Every month I take out a moderate amount of cash and stick it in the groceries wallet. It’s the only ‘joint account’ Amanda and I have at the moment, because it is the one thing we both use that is hard to track (unlike, say, bills, which she pays, and I reimburse her for, or the odd household expense which I buy and she reimburses me for). I need to make that a special accounting item in my money tracker (I’m using Yodlee, love it), and then see where I can cut out the rest of ‘cash’. I tend to be lax on packing lunch and things like that, knowing that if I don’t do it, I can just go to the cafe or brueggers, etc.

I propose that once I’ve meaningfully disposed of what I currently have in my wallet, to try going a week with no cash at all and see how it works out. It’ll probably force me to shape up a bit on my casual spending, and I can rest secure in the knowledge that should an emergency come up, I can get to an ATM.

I understand that for many people credit cards are problematic because they don’t think of it as spending, and seeing the money actually change hands reinforces their thinking, but for me cash is easy to spend, whereas every time I use the credit card, I can picture the charge adding up on the statement, rather than the money in the wallet going subtracting down. I suppose the difference may be what motivates you more: for some of us, we fear debt more than we love money, so increasing debt with a credit card is harder than depleting money with dribbling out cash. I mean, what else is money in the wallet for, if not to be spent?