Cash Please

rjexit5December 26, 2012

My wife and I switched to using all cash for two months for purchasing items. (groceries included) Though we pay our credit card balances in full each month we wanted to see the money leaving our hands for each purchase; there should be no difference right? :)

All we did was make the decision to get money from the ATM each week for what we thought was reasonable for each of us to spend on groceries, gas, dining out, and all extras. We budgeted the same amount of cash each week and we used our credit card purchase history to help determine that weekly amount. Thursday was the wallet refill day and come the following Tuesday/Wednesday things got tight early on.

What we learned:
1) We got mad the first two weeks because we both ran out of cash way soon.
2) We could do better with the 'extras' category of spending, like cut most of it out.
3) We found ourselves putting money aside each week to buy something bigger in a future week.
4) Those items we were 'saving' up for ended up not seeming important after we had cash money to buy them. Guess we did not need them.

Overall we are glad we did this, it was terribly inconvenient for buying gasoline, but we saved money without really trying to. We are both back to using our credit cards (we continue to pay the balance in full) but we are both glad we went 'old school' with cash purchasing. It opened our eyes to what we needed vs. what we just wanted right then.

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We've been cash users for "ever" and I'm sure that's why we've never had any credit card problems and are completely out of debt, including the house. Every dollar has a "name" - groceries, savings, walking-around money, vacation, emergency fund, Christmas....

-Cash for groceries is my first way to save on the food bill ($125/month). Using grocery money for food ONLY is the second way to save. I never spend the entire amount each month, and I never borrow from next month - no matter how great a food bargain I find. As money in the grocery budget accumulates, I'll buy a year's supply of powdered milk, or a large purchase of grains/seeds/beans so I can save by buying in bulk. While the garden is in full swing I save a lot of money then because I don't need to purchase produce. I sometimes use that money for special purchases, like a large ham or turkey for a holiday meal, otherwise I stick to $10 worth of meat each week.

-I use the Neal Boortz $1 savings plan. That means I save all my $1 bills and each month I put them in our Christmas/Emergency Fund savings account in the bank. I've always saved at least $500 every year, and as much as $1,000 doing the $1 savings plan. Naturally, this savings program only works well for people who use cash instead of credit/debit cards.

-You're right about buying gas with cash being inconvenient. We use our Sam's Card for purchasing gas at Sam's Club and that bill is P.I.F. each month.

-I started something in August that has helped the bottom line. Other than groceries, I only "shop" every other month. November was a shopping month, but December wasn't, so I had all the Christmas gifts done and wrapped before December ever got here. Shopping often becomes a habit without any real reason or purpose for it. By waiting for a "shopping" month before making a purchase, I have a longer period of time to consider if something is a want or a need. Most "wants" are unnecessary. If you shop because it's entertainment, try going to the library instead and "shop" for a book to read, or a how-to video to learn a new skill. I have been able to take my "walking-around money" (aka allowance) and put it in the savings account rather than frittering it away on mindless shopping sprees.


    Bookmark   December 27, 2012 at 2:21PM
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In the almost 40 years we've been married, we've always used 'only cash'. We make all our purchases cash, we even pay most of our bills with cash--we just run down to town hall to pay the taxes, electricity, water, sewer, trash, etc, and we go to the comcast office to pay that. Only checks I write in a month are for the phone bill, gas bill, and the one I write to take our direct deposit out of that account (we have an account in one bank for our dd's, and our regular banking is done at another bank--for safety's sake).

It is far easier to avoid frivolous spending when you're spending actual cash--which is finite--as opposed to swiping a card.

We do have one credit card account between us. The card stays in the safe, it's used only for ordering our medications, and for renting cars/buying airline tickets, etc when we travel.

A few years ago my wallet was stolen. That brought home to me the benefits of using cash, though. I lost cash (a significant amount, because DH had put a deposit in the checkbook), my credit card, my checkbook and all the 'stuff'--license, medical cards, etc--that you keep in your wallet. Luckily, I've never been one to carry photoes. Of all the things I lost? The $1300 cash was the least important. The hassle of replacing all the other stuff, of worrying that they'd be misused, and the YEARS of dread that someone might steal your identity were far worse than those few $$$ I lost. Don't get me wrong--$1300 is a LOT of money to us, but money is finite, the potential losses from the other things were infinite and gave us a great deal of worry. I even had one of those emergency keys for my car in my wallet--and the thieves had my address, so they could have easily stolen my car!

Cash is definitely the way to go. Not to mention you can get far better deals that way--you can often bargain for a discount with cash, because the merchant isn't having to pay the credit card fee, nor put out the effort needed to file and collect the bill from them.

And gasoline? That's much easier with cash. Oh, I forget, often that most of you live elsewhere. Here, we only have full service stations--we drive up, stay in our car, roll down the window, tell the attendant what we want and he puts it in the car--then we just hand him $20, $40 and are on our way. Guess it's a little more involved when you have to pump and go inside to pay, right?

    Bookmark   December 29, 2012 at 9:58AM
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"It is far easier to avoid frivolous spending when you're spending actual cash--which is finite--as opposed to swiping a card. "


The actual cash that you need to pay off the card each month is finite also.
I use the CC as much as I can, and get the perks.

I cannot pay ANY bill in person anymore, so I do that online.

    Bookmark   December 29, 2012 at 1:27PM
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rjexit5 are correct it is finite either way. Have you tried to put the card down for a month and use cash only? I'd be interested to hear if you have a slightly different feeling toward parting with the money when it is cash. I never thought it would have been any different but it actually was. I surprised myself.

    Bookmark   December 29, 2012 at 2:06PM
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Why would I?

I do not want to carry around large amounts of cash. That's very unsafe.
I do not want to give up the perks of the CC. They're very rewarding.

I am by nature frugal, and we are a one-in-one-out household.
I do not buy on impulse, as I know that I have to give something up at home if I do buy. That alone makes me but very little new, unless something is worn out/broken/used up/etc.
We live on a strict budget, and we stay within that budget. Cash will not change that.

I just tried to picture paying college expenses for the kids with cash instead of CC. Much easier to call and put it on the CC instead of a 12 hour round trip (for DD's college)with cash... at least it was for me.

" I'd be interested to hear if you have a slightly different feeling toward parting with the money when it is cash."

The money I part with IS cash.... how else would the CCs be paid off in full each week?

Different strokes for different folks!
Glad you found what works for you; equally as glad DH and I found what works for us.

    Bookmark   December 29, 2012 at 10:08PM
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Very true and it does make paying for some thing way easier. We are back to using cc for most purchases but our eyes are more open now. Thanks for sharing.

    Bookmark   December 30, 2012 at 9:16AM
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I have always been aware that the CC is the same as cash, either way it comes out of your pocket. When I was younger and lived payday to payday, I was leery of using them. Now I charge almost everything over $15. because it's easier.

    Bookmark   December 30, 2012 at 3:05PM
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There's another issue about using credit cards. I'm curious--does it bother those of you who use them at all that the merchant doesn't get the full price? They have to pay a fee for you using your card, and they have to wait for their money. That especially bothers me when buying (as I try to) from local mom & pop type stores.

And unfortunately, the fact that so many people do use plastic these days, means that the prices are adjusted accordingly and those of us paying cash are paying premium prices unless we take the time and effort to bargain them down. That's a bit annoying, as well.

    Bookmark   December 31, 2012 at 1:08PM
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We pay cash for almost everything under $50. When we use the credit card, I round up to the nearest $5 increment and write it into the checkbook register. When the bill arrives, I credit the amounts back into the checking account, and the credit card bill is paid off.

Our veterinarian gives us a 10% discount when I pay with a check or cash instead of either credit card or debit card, both of which incur fees to the business. The local gas station gives 5 cents a gallon discount for cash. I've negotiated small discounts with other merchants for cash, too.

And I pay the bills online. And I don't carry around big bills either. The gas station is happy to get 5's and 10's for gas, but would be put out to break a $100 bill. So if you pay cash, be considerate and keep the bills to less than 20's.

    Bookmark   December 31, 2012 at 1:38PM
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I doesn't bother me a bit if they don't get the full price. They don't have to accept cards, it's their choice and if it hurts their business, they should price their merchandise accordingly which they probably do anyway. I had a home based tour company ask for a check instead of using my card. She explained that she would lose $200 if I charged it. She would have accepted the card, but it was no problem sending a check.

    Bookmark   December 31, 2012 at 4:25PM
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"I'm curious--does it bother those of you who use them at all that the merchant doesn't get the full price? "

If it does not bother the merchant, it does not bother me.

I will ask local mom & pop places if they would prefer a check, and they say almost unanimously say no. So Discover it is!

The only place that objects is the local butcher... cash or check only. No plastic of any kind!

    Bookmark   December 31, 2012 at 9:20PM
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We like the cash for spending money-groceries, pocket cash. It does help us keep tabs on things. When the cash is gone, there is no more spending until Friday.

    Bookmark   January 1, 2013 at 10:45PM
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Thanks for the idea of every other month shopping. That is a great idea!

I have a friend whose dad is a doctor. He recently went 'cash only." He decided to stop playing the insurance game of billing insurance $160 for an office visit & getting $50 from the ins co. By the time he paid the billing service to process it all, take away another $5. Now he accepts patients cash only, $50 for an office visit. Patients can choose to send their receipt to their ins co and get reimbursed. This practice hasn't suffered at all - the schedule is full every day.

Tha got me thinking about cash transactions and then I saw this thread. It has given me a lot to think about.

    Bookmark   January 2, 2013 at 6:36PM
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I'm currently deeply in credit card debt. I won't even post the amounts or how it happened because I got flamed the time I did. But I am on track to pay it all off. One thing I'm doing in 2013 is making a budget, using all cash and using the "envelope" system. Also already have an emergency fund of $5000 built up. To be used only for something major like if a car breaks down or disabled hubby has to go into assisted living.

    Bookmark   January 3, 2013 at 9:07AM
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Tiffany, purpleinopp GardenWeb, Z8b Opp, AL

If I can't pay for something today, I probably can't pay for it tomorrow either. When/if I have the money, it will be spent. Giving a bank extra money to have something sooner is not something I'm willing to do. I'll never do another car loan or credit card. Those are just lining the pockets of the already rich.

We will spend no dime before its' time.

    Bookmark   January 4, 2013 at 12:03PM
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Local gas stations charge a different amount for cash, debit and credit purchases. So I now use only cash for buying gas. It is part of my budget. I use the "envelope" system. Luckily we have 3 cars so it seems one is always available and has enough gas. Otherwise I'd have to walk when I run out of gas money.

    Bookmark   January 20, 2013 at 9:03AM
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Mommabird, I have never heard of a doctor doing business that way. I pay nothing except premiums and I don't have to file/fill out any papers. I don't pay any deductible either. I just would not go to that doctor. The insurance probably wouldn't reimburse any of his patients if the doctor didn't send the info.

    Bookmark   January 21, 2013 at 6:56PM
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Hubby had a great doctor (Psychiatrist) who treated him for depression related to his MS. He had been taking both Medicare and private insurance plans. The Dr. is over 60, decided to semi-retire by limiting his practice. First he stopped taking any health insurance plan, then about a year later he stopped accepting Medicare. He accepts cash only, $150 a visit. Hubby tries to limit his number of office visits, phones when he needs prescription refills. Works for us because DH really likes this doctor.

    Bookmark   January 23, 2013 at 9:51AM
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That's interesting, I did not know a doc could cancel patients on medicare. I know they can....not accept any new ones, but shocking they can deny someone they have already accepted. Doesn't sound legal to me.

    Bookmark   January 23, 2013 at 6:52PM
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I'm not so sure it's legal for a doctor in the U.S. to refuse to accept Medicare. I'll make some phone calls and see what I can find out.

    Bookmark   January 29, 2013 at 9:15AM
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Oh, yes, Jannie, of course a doctor can refuse to see Medicare patients.

    Bookmark   January 29, 2013 at 10:30AM
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Jannie, would it not be better to use that $5000 towards paying off your credit card? It seems to me it would reduce your interest considerably.

    Bookmark   January 29, 2013 at 11:54AM
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It is legal for docs to refuse to accept medicare. That is why you should always hang on to your doctor even if you are unhappy with him until you find a good one that accepts it. More and more doctors are opting out of medicare.

What I was wondering is can he stop medicare on a medicare patient he has already accepted. One who has been using medicare and he accepted it.

    Bookmark   January 29, 2013 at 3:22PM
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Yes, a doctor can change his business practices at any time, and stop accepting Medicare or other insurance plans.

This post was edited by sushipup on Tue, Jan 29, 13 at 18:35

    Bookmark   January 29, 2013 at 3:37PM
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Any medical professional can stop seeing any patient for any reason, as long as they do not "abandon" the patient. That generally means giving the patient enough notice to find another provider, or transitioning that patient to another provider, or similar action. There may be specific requirements for Medicare regarding this, but it certainly can be done.

They can also opt out of plans, though while a patient can submit a receipt to most plans for reimbursement (there are some areas where this is the norm for most providers), Medicare generally requires the bill come directly from the provider. If I remember correctly there may be a few limited exceptions, but Medicare is pretty particular about billing.

    Bookmark   February 2, 2013 at 11:16PM
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A sandwich shop next door to where I work now adds thirty-five cents to each order paid for with a debit card. I don't know if they do with credit cards. I think it used to be illegal to charge extra for using a cc, but you could offer a discount for cash.

Last time I went to get my hair cut at the mall, they no longer accepted checks. That Flo-bee and those thinning shears come in handy.

Shopping every other month sound interesting. I'm going to try that.

CC pif each month here, too.

    Bookmark   March 16, 2013 at 8:14PM
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Now into the 7th month of every other month shopping, the experiment has worked VERY well. I was surprised how much money from my "walking around money" I was able to put in the Christmas/Emergency Fund, and I'm glad I gave it a go and will continue this money saving practice.

A secondary effect, I don't do as much shopping on the months I do shop. It's shopping targeted at things that are necessities. ;-)

I also cut my own hair, but I budget $20/month for it and put it in the Christmas/Emergency Fund Savings Account each month. There's another $240 saved each year.


    Bookmark   March 17, 2013 at 9:52AM
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A Professional Organizer gave me some good money tips. "Shop in your own house". Instead of buying food, use up what is in your fridge, freezer, and pantry. It's a great way to use up leftovers. And you'll find all kinds of great recipes. I know for sure I have two batches of frozen soup in my freezer right now. That's enough for 2 dinners. Instead of buying more cleaning products, use what you have. I have three gallons of bleach in my basement. More than enough to clean my two bathrooms for an indefinite period of time. There's plenty of good clothing hanging in my closet. And so on.

    Bookmark   March 19, 2013 at 11:58AM
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I've seen several posts from Grainlady who says she cuts her own hair. Most recent post I read mentioned that FloBee thing and thinning shears.
Well, that's great if you can do it. If I tried to cut my own hair I might as well buy a wig.
Instead I found an excellent stylist and since she knows I'm tight on funds due to divorce, chemotherapy, etc, she gives me a discount.... and in return I'm refurbishing some patio chairs she recently found.
Bartering is definitely one way to save.

    Bookmark   June 27, 2013 at 7:52PM
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I am a small businessman. I have been doing craft shows as our sole household income for over 30 years. I take plastic at the craft shows. But I put a sign in my booth as soon as it was legal to do so. I now have a $15 minimum amount for plastic.

You would be surprised at the number of NITWITS who want to pay for a $5.95 item with plastic! These are the same clowns who pay for a $2.50 cup of coffee with their credit card!

    Bookmark   July 1, 2013 at 8:05AM
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I understand that and I would make sure I had cash at a craft show. I have gone to lunch and forgotten to bring cash so I will charge a $ 5.95 lunch. I try not to do that because I know they lose a bit on every charge. I also know every place I have been accept it gracefully to keep my business.

This post was edited by EmmaR on Tue, Jul 2, 13 at 0:44

    Bookmark   July 1, 2013 at 9:17AM
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Don't get me wrong. Some of my work can run into the $250 range, and naturally people don't carry that kind of cash. But I have inexpensive ($5 to $25) items too. And many times those items pay the $250-$500 booth fees for the shows.

    Bookmark   July 1, 2013 at 9:52AM
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"You would be surprised at the number of NITWITS who want to pay for a $5.95 item with plastic! These are the same clowns who pay for a $2.50 cup of coffee with their credit card! "

I do not see how that makes them NITWITS or clowns, as you put it.

    Bookmark   July 1, 2013 at 10:36AM
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Because the merchants LOSE MONEY on that $2.50 sale, that's why. And these people who can't afford $2.50 in cash do not care. That's why they're nitwits.

Then they go to the coffee shop with their trusty plastic money, see it went out of business and wonder why.

That's why more and more merchants are having minimum purchases for plastic. And if they lose a customer, they save money.

    Bookmark   July 1, 2013 at 7:12PM
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Doesn't make the card holder a nitwit... they are just using plastic, which the merchant allows.

Interestingly enough, I have yet to see minimums anywhere in my area. I do not drink coffee, though, so I do not know how things are in coffee shops.

So, you turn away $14 transactions?

This post was edited by LuAnn_in_PA on Tue, Jul 2, 13 at 10:06

    Bookmark   July 2, 2013 at 8:18AM
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I've never seen minimums here either. There are more than one way to be classed as nitwits.

    Bookmark   July 2, 2013 at 3:32PM
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Tiffany, purpleinopp GardenWeb, Z8b Opp, AL

Paying interest next month on coffee one drinks today sounds pretty lame to me, in cases where the plastic one is using is credit not fully paid monthly, thus accruing interest.

I think all of this plastic for unnecessary purchases (small, in person) is driving the cost up for about everything. Isn't the standard fee on V/MC transactions 3%? That's what it cost the last retail store I where worked, in 2009. So I guess everything is somewhere around 3% more expensive than it needs to be, for merchants to make the same profit over top of that fee. Different stores may have different arrangements with their credit processing companies, IDK...

We recently went on a multi-state vacation by car and our cash only policy saved us $$ the last night. We were willing to pay what seemed a reasonable amount quoted at the handy (nationally recognized name brand) motel next to where we ate dinner, having decided we were too tired to continue driving. But they insisted on obtaining a credit card number. We refused and found a perfectly good room at a mom'n'pop a few doors down, for $35 less. The un-remodeled LARGE older room was actually a refreshing change, as was the nice lady who said to let her know if anything was wrong 'cuz she owns the place. She thought we and our cash were wonderful, and likewise.

Supposedly they no longer allow banks to "fake people out" by not considering a check deposited until after a few debit card transactions happen, conveniently scooping money out of people's accounts each time. But they will find other ways to steal your money. The last straw for me was the "round up" program the teller encouraged me to sign up for. Every time I used my debit card, it would round up to an even amount, with the rounded-up amount being put in a savings' account.

I wasn't using that (or any) debit card often or for many purchases, but it had accumulated to $14-something before I stopped working at that job and did not have cause to use that account - in another city, which I had setup for direct-deposit of pay checks from the former employer.

After 3 months of inaction in the account I received a letter that the balance was now $0, explaining that the $7-something in the account and the $14-something in the savings' account had been stolen (I've used a slightly different word than they did) to recover an inactivity fee. Guess they require more entertainment from accounts. Mine had become unacceptably boring, and, of course not generating any fees for them.

When I called to ask about it, I was told I should have read the fine print when signing up for the round-up thing, which activated the possibility of inactivity fees on existing accounts. The only way these folks will see more of my money is if I drive by the bank, holding some out of it out of the window.

In the 90's I used a debit card much more, sometimes constantly for about anything, and had some additional expenses, time-consuming...

    Bookmark   July 2, 2013 at 5:08PM
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"...So, you turn away $14 transactions?..."

I never have to. The intelligent people see the sign and give me cash every time.

When I say coffee shops, here in Vermont, there are few national chains. I don't have a clue where a Starbucks is.

But we do have local bakeries and places where people stop for their coffee on their way to work. Many of these are called "general stores". Everybody knows everybody and nobody would think of paying for such inexpensive items with plastic. If necessary we just "put it on our tab" and give Jenny & Earl cash on payday.

I guess we're just not as sophisticated as Lu Ann. I still like life in the slow lane.

And I escaped Pennsylvania to move to Vermont. Lived in the Poconos. Couldn't get away from the NOO YAWK transplants fast enough!

    Bookmark   July 2, 2013 at 7:57PM
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I don't pay interest on my plastic.

    Bookmark   July 2, 2013 at 10:24PM
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"I guess we're just not as sophisticated as Lu Ann."

So now you lower yourself to a personal dig... nice.

I'll bite... what makes me soooo sophisticated in your eyes? Wait, never mind as I really could NOT care less.

And if life in the slow lane requires minimums on CC transactions and snide put-downs... I'll pass.

Over... and out.

This post was edited by LuAnn_in_PA on Tue, Jul 2, 13 at 22:44

    Bookmark   July 2, 2013 at 10:39PM
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LuAnn, you are being very thin-skinned these days.

Let it roll.

My observation.

This post was edited by sushipup on Wed, Jul 3, 13 at 0:25

    Bookmark   July 2, 2013 at 11:15PM
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No, it was rude, and LuAnn was right to call him on it.

    Bookmark   July 3, 2013 at 10:52AM
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