There are many outstanding questions that have stumped the masses over time. Which came first, the chicken or the egg? Where do babies come from? Do flies spin before landing on the ceiling or do they fly upside down? Where’s the beef? Will the Cubs ever win another World Series? Will that be paper or plastic? It has taken many brilliant minds to figure out the answers to most of these questions. But the last two questions still seem to confound many people. I’ll answer the Cubs question later, but right now let’s solve the mystery of paper or plastic.

Paper or plastic is a question we have all been asked several times by the cashier at the grocery store. Most people do not give the matter any thought and quickly reply plastic. 100% of the time this is the wrong answer because we are answering the wrong question. We mistakenly believe they are talking about what kind of bag we want. Who cares what kind of bag? From this moment on, when you hear the question will that be paper or plastic, you need to consider how will I pay for these groceries? That question has implications, and it can affect your life. And your answer should always be PAPER. Now really, how is “paper” going to affect your life? Using paper (cash) to pay for your groceries will help you gain control of your finances.

1. You will spend less money with paper because it hurts to spend cash.

We like money, and we don’t like the idea of being without money. When it pains us to spend cash it will cut down our “spur of the moment” spending. If I am going to hand over $150 to the cashier, that hurts. You will not see a $4 box of Lucky Charms in my cart. Instead, I am going to buy cereal that is a better value. On the flip side, when you use plastic, you do not experience the pain because we don’t see our bank account diminishing.

2. Using paper will help you stay within your budget; thus, it will help your budget succeed.

Prospective clients often tell me that using their debit card helps them keep track of their spending. However, the majority of them can not tell me exactly how much they spend on their groceries. If they would put cash into an envelope marked “groceries” they, could tell me exactly how much they spend. If the envelope is empty, spending on groceries is maxed for the pay period.

3. Using paper will simplify your life.

You will no longer go to the store and have to worry about whether your card will be accepted or if you have enough money in your account. If you have money in your envelope you can go shopping; if your envelope is empty, you go home instead.

4. Using paper creates discipline in your life.

As in reason #3, if you have money in your envelope you go shopping; if your envelope is empty you go home.

5. Using paper, along with a budget, lets you spend your money without feeling guilty.

When you plan ahead and use a budget, you determine the best use of your money. When you put money in your grocery envelope, you can now feel free to spend it. Clients have often told me that they feel guilty when they use their cards because they feel that the money could have been spent elsewhere.

6. Using paper is safer than plastic.

Many people try to argue with me that they use plastic because they don’t feel safe carrying all that money around. They are afraid they will be robbed. My first question is, “how much did you plan on carrying around with you, thousands?” My second question is, “how do you carry your money?” Are you waving it in the air so that everyone can see it? You are not going to be carrying wads of money around. When I go to the grocery store with $150, that equals seven $20 bills and a $10 bill, the stack of bills isn’t as thick as a credit card. The fact is you are more likely to have your credit card or your ID stolen than to have your cash stolen.

7. Using paper on groceries is better for your credit score than plastic.

That’s right, when you use plastic to pay for your groceries, even if you are paying your credit card bill off every month it damages your credit score. Using a credit card on groceries tells the credit scoring companies that you may have cash flow problems.
So the next time you are asked, will that be paper or plastic, I want you to confidently tell the cashier that you will be paying with paper. If you would like to discuss this further or would like help getting started, please give us a call at 317-858-7270 or email us at coach@TheFinanceCoach.net.

Now, concerning whether the Cubs will ever win another World Series, I think we all already know the answer to that question. Just wait until next year.