The Power of Cash – A Lesson Learned From My Purpose Driven Father
I grew up observing my father paying for everything in cash. On vacation, at dinner, at the store, my dad would always pay in cash. Once I saw him rip open an envelope with a credit card offer and cut the card with a pair of scissors. That image of him destroying that credit card left an impression on me. Like a lot of things my dad used to do, he never told me why he did that to the credit card, but he was consistent with his habit of paying for everything in cash and strayed away from credit.
Dad is not one to lecture, which was helpful when I got myself into credit card debt as a young adult. I eventually got myself out of debt and it was a painful experience, but it was then that I appreciated my dad’s stubbornness to live a cash only lifestyle.
I never questioned him about his methods, I just observed and realized that his approach to finances is simply an act of discipline. I noticed Dad bought things in clusters and then paused and didn’t buy much for a while before purchasing things once more. It was a cycle based on cash flow.
He doesn’t have complicated checks and balances, or a software, or phone application to track his expenses. He doesn’t use an envelope system, or have a multitude of checking accounts to put money away for special projects. He simply identifies his goals and pays for them as the money becomes available.
My parents purchased their lake property in the mid 90’s. They decided it would be their retirement home. It took them nearly a decade to build and furnish the house. It was not their goal to take ten years to build their new home, it was simply a function of cash flow. When the money was available, they would finish a portion of the house. For some, a ten year house building project would frustrate them, but Dad was fine with it, because he built a beautiful home and was debt free at the end of the project. A perfect way to begin retirement!
Dad’s philosophy on finances taught me three fundamental lessons:
- Pay cash for everything;
- Don’t buy things you can’t afford;
- Delay gratification.
Today, I am debt free and thriving in my life, because of a simple lesson in the power of cash only. How many credit cards do you carry? Do you have a balance on your credit card right now? If so, why? How long do you plan to live that way?