When I read in the newspaper about yet another story of corporate corruption and greed, it makes me angry and upset. Sometimes, I feel hopeless. But other times, I remember that old saying, don’t get mad, get even.

I remember that I can vote with my dollars.

It wasn’t until I was in my 20s that I realized that by living in the United States, I was living in a capitalistic system.

Years later, I realized that within a capitalistic system, voting with your dollars is one of the most powerful tools for change.

The Free Dictionary defines capitalism as “an economic system based on the private ownership of the means of production, distribution, and exchange, characterized by the freedom of capitalists to operate or manage their property for profit in competitive conditions.”

Most of the time, we have the freedom to choose what we want to buy and from whom. That is power.

When I read about banks or corporations that steal from their customers but their executives still get paid millions of dollars and don’t have to go to prison for their crimes, I vow to not put my money into that bank or corporation.

When the employees of a store treat me badly, or I read that they treat other customers or employees badly, I will complain to the management and then I will not shop at that store until I hear that things have changed for the better.

When I feel valued and well served by the employees in a shop, I will go back to that shop over and over again. When I find a product or service that is of excellent quality and value, it feels natural to tell all my friends about it. When I read about a company that treats its employees well and pays them fair wages and benefits, I want to support that company with my dollars. I will choose them over another company even if they charge more for their goods or services.

There’s so much in this world that we can’t control. That’s life. But since becoming Super Frug, I’ve realized that I can control where I spend my money.

It takes more time and effort to vote with your dollars, but every time I do it, I feel like I am doing my part–a small but important part–in creating a better world.

 ps. Pile of cash photo by Talia Felix.

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Growing up, I only bought things with cash. I didn’t get a checking account until I got my first job. Before then, I kept my cash in an envelope in the top drawer of my dresser, stashed beneath some old sweatshirts.

If I used up all my cash, I was broke. And I had no one else to blame.

Then, I went to college. And I learned the meaning of plastic paradise.

I’m pretty sure it was during my first week in college that I got my first credit card. It was like  the second rite of passage to adulthood–move away from home and…get a credit card.

It was in college that I discovered the meaning of one of the worst 4-letter words in the English language: DEBT.

It wasn’t a ton of debt–under a thousand dollars–but still, for someone who had previously only used cash, it seemed like a lot of money. I paid it off my junior year with some help from my mom that came with an extremely harsh tongue-lashing that I still remember to this day.

Did I feel bad for being in debt? Yes. Did it stop me from using credit cards? No.

When I got married for the first time, my husband Erik and I ran up a large credit bill in the thousands of dollars. We vowed to pay it off within a year. It took a lot of scrimping and pinching, but we did it. The pain of paying interest stayed with me this time. After that, I tried to pay my credit card bill in full every month.

That was almost 13 years ago. Just because I haven’t been in debt since then doesn’t mean I haven’t spent money stupidly and wastefully. I have. But, a few years ago, I finally figured out a way to cut down on my bad spending habits. I went old school Super Frug–just like my parents and grandparents (and their friends) did before me…

I pay with cash.

Research has shown that people who use credit cards unconsciously spend more than those who use cash. Studies also show that there is an emotional pain that comes when you hand over cold, hard cash for a purchase, whereas using a credit card allows you to focus on the instant gratification and benefits of the purchase.

Paying with cash makes me think through my purchases.
– Do I really need this or do I really want this?
– Am I buying this because I need it or because I’m upset or sad or bored?
– Am I going to die if I don’t buy this?

After Marcus and I pay fixed expenses such as mortgage, utilities, health insurance, doctor/dentist bills, and car insurance (usually by check), we give ourselves a monthly allowance for groceries, dining out and entertainment. When we run out of cash, we stop spending.

Paying with cash is simple but not necessarily easy. Being Super Frug isn’t about easy choices; it’s about making smart, informed, and sometimes difficult choices that are in line with your values. Paying in cash wasn’t easy when I started, but over the years, it has helped me to truly understand the value of the dollar and to spend more wisely.

Now, I no longer keep my cash in the top drawer of my dresser. I keep it somewhere else that’s a lot harder to find.

Now when I pay with cash, there is still some pain, but it’s pain I’m willing to feel in order to live the life that I want to live.

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I read somewhere that Humphrey Bogart called it his f*ck you fund. Some call it an emergency fund. I call mine the compound.

Whatever you choose to call it, it’s crucial to set up a special fund with money to survive on in case you lose your job, your partner loses his/her job, you absolutely can’t stand your job anymore and you quit (hence Bogart’s f*ck you fund), you have sudden health problems, etc.

With this special fund in place, you can worry less and enjoy your life more. Being Super Frug isn’t about deprivation, it’s about living well on less. You can’t live well if you’re worrying about how you’re going to pay for an emergency.

You’ve heard that old saying before: pay yourself first. That’s what it’s all about. Even if you have debts to pay off and can only save $20 from every paycheck, that’s fine. Start now.

Where to stash your cash?
Set it up in a savings account or a separate checking account. You want to be able to withdraw your money easily and quickly in case of a real emergency. The credit union that I bank at allows me to have as many savings accounts as I want, no charge.

How much should you save?
Some people say you should save enough to cover your basic needs (rent/mortgage, utilities, phone, groceries, health insurance, car insurance, gasoline, bus/train fare, etc.) for 3 months. Others say 6 months. Some say a year. I’m paranoid about stuff like this so I aim for a year’s worth. Everyone is different. Choose the number of months that sounds right for you.

Why do it?
We all need a cushion in case of emergencies and major life changes. With it, you will feel taken care of and confident in your daily interactions with money. Without it, it’s like performing a trapeze act without a net. You could lose all that you’ve worked hard for. Don’t wait. Create your safety net today.

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