I was reviewing the joint financial accounts that my partner and I share. We go over “the books” (which I keep on Quicken) at least once a week. He trusts me, but I insist on going over our income and expenses regularly with him so there are no questions about how we are doing, what the amounts of our regular bills are, who is due what, and so forth. One of the most frequent reasons couples (gay or straight) argue is about money. My partner and I have had our share of disagreements, but never — in all of our 19+ years — have we argued about money. Why?

First rule: we do not spend what we do not have.

Second rule: we do not spend money on stuff or activities because they’re new, trendy, fashionable, or the neighbors do these things or have them. We’re happy with clunky old cars, no add-on services for entertainment, no smartphones, not eating out at restaurants, and so forth. (I admit, it helps when you love your home and want to stay there, and when your partner is a recluse and hates socializing.) Okay, call us “cheap.” I prefer the word “frugal,” but whatever word you use — refer to rule #1.

Third rule: we discuss it. Finances always can be tricky when one person makes the decisions on spending money from an account contributed by two (or more) people. There might be an unexpected cost or change in expenses. It happens. But don’t let it go by without advising the other. The more one communicates the better.

Fourth rule: pay cash. Yep, you know — that green stuff. It is much harder on a psychological level to spend money when you have to open your wallet and remove something you know to be valuable. Cash. Moola. Currency.

Plastic is obscure. You don’t really see yourself spending money when you charge it on a card or swipe a debit card. Yeah, you eventually pay for it, but when you do not see actual cash leave your wallet, and you put that plastic thing back into your wallet, then you do not feel as if you have spent money. Many studies show that people who use plastic regularly overspend. They have some vague notion that they will make up for it when the bill comes (or are shocked when the account that a debit card deducts from is overdrawn.)

I know there are good reasons to use credit and debit cards. When used responsibly, they are a tool that add safety and flexibility in managing finances. But not if using a debit card incurs usage fees. Those nuisance fees add up to a lot of money. I have never paid a usage fee in my life and have no intention of doing so. Further, for credit cards, they are not good if you run up a balance that incurs interest at high rates every month. We use credit cards for “big” expenses, and for purchases made on-line. But we pay them off every month and never carry a balance. How do we do that? Rule #1: we do not spend what we don’t have.

However, my partner and I both are among the minority of people who choose never to use a debit card. It’s so easy to lose track of what you spent, and as I said above, when you don’t spend cash, you don’t feel that you are spending money. So yeah, I’m the guy standing behind you in line at the grocery store, huffing and puffing, while you swipe your plastic. Or another way to look at it, I’m the guy making you wait while I am expecting change for the cash that I paid for my groceries.

These days, the looks that we get from store register clerks when we hand them cash and wait for change is hysterical. I had a clerk in a drug store take my $10 bill for a $7 purchase, then pick up the phone and make a store-wide announcement, “I need change — this customer is paying in cash and I don’t have change!”. Oh brother….

Happy to report that this past month, we have been on the “total cash” system, and haven’t charged or debited a thing. Our expenses have been low. We like it that way. 🙂

Life is short: understand your finances and the psychology of money.