Cash payment is king now

Yesterday, I blogged about the dangers of using credit cards to pay for your purchases during this economic crisis.  Today I shall elaborate more about budgeting and paying for your purchases in cash instead.

Monthly ‘Play’ Budget

For me, I set aside 10% of my monthly income for my ‘Play’ account which is for buying toys, indulging in eating out at places that more expensive than eating at food courts, plus extra clothes, shoes and bags that are not really necessary but happened to appeal to me at the times of purchase.

Budget Allocations

Different people have different budget allocations.  I prefer buying toys and eating to fashion, hence most of my ‘Play’ account goes to toys and food.  I wonder if it is a coincidence that most toy collectors that I have met are the dressed casually in t-shirt and jeans or pants types.  They are hardly the fashionistas types for if they are, they probably won’t have much income left each month to indulge in toys (for being a fashionista is an expensive hobby).

Biaised Expenditures

Many of us are inclined to spending more on certain kinds of things.  I observed that most toy collectors I know are very prudent when it comes to other non-toy expenditures.  Most of them save on furnishing their wardrobes and tend to splurge on toys.  They also tend to use practical possessions like their mobile phones till the gadgets are almost going to break down before changing them.  However, you can get ’shocked’ by the hundreds or even thousands of dollars that these same toy collectors are willing to shell out to get their exclusive toys from online stores, online auctions, local shops etc. 

Cash Payment Is King

It’s best to pay for your toy purchases in cash whenever possible during this financial crisis.  Cash is more ‘painful’ for you to part with each time you take it out from your wallet or from the ATM machine.  This tends to make you think twice before parting with it.  Credit card payment and even NETS payment on the hand, are more like payment with ‘invisible’ cash.  No doubt the payment by NETS is deducted immediately from your account but it’s still ‘invisible’ cash at the point of purchase.  You only see your expenditure when you update your bank passbook or receive the monthly bank statement.

Avoid Super Expensive Toys

Besides paying in cash, avoid collecting the super expensive toys, like those human-sized ones that cost thousands of dollars.  I wonder how many people have the space to keep them at home?  For every one of those ‘giant’-sized toys, you can buy multiples of smaller toys that take up much less space.  However if a toy collector is already at this stage, I know it is more of an emotional thing than a financial one.  The toy addiction has become too great to resist.  Good luck to these expensive toy collectors for only they can help themselves watch their toy expenditures now.