When Spending Gets Out Of Control Try Cash
Creating a budget to keep spending under control can be one of the most difficult things we have to do when it comes to our finances
. Spending money is easy, and thanks to the abundance of ATMs, debit and credit cards we go through money without even realizing it sometimes.
The key to keep spending under control can be as simple as taking a step back and get back to basics. Do you remember the days before you had instant access to your bank account via a plastic card?
Having access to cash has never been easier, and more importantly that ease of access has virtually eliminated cash for many people. With a debit or ATM card we know all too well how easy it is to make a purchase, it is convenient, there is no doubt about it.
When we become dependent on using electronics for spending our money, the problem lies with the value of money seemingly being diminished. When you stop to grab lunch and swipe your card and see the receipt all you see is $6.50 printed on a piece of paper.
You obviously know what $6.50 is worth, but how easy our brain forgets about that last purchase when it is time for a new purchase. The little purchases, regardless of how small add up, but when it is all done electronically we view each new small purchase as just that.
What if when things got difficult for you to stay within your budget, if you tried cash again? Everyone loves reward points and cash back bonuses from their credit cards and that can make it hard to go back to cash that doesn't give you anything back, but over time the results can be great.
So for a week, try an experiment by switching to cash only. We all know what we need to buy throughout a week. We have regular purchases such as lunch, some grocery shopping, gasoline and maybe the occasional stop for a coffee in the morning.
Then with this basic budget in mind, come Monday make sure that you have cash in your wallet or purse to cover these expenses. Then be sure that everything you buy in your daily routine is done with cash. It sounds simple, right?
It is a simple premise, and while paying with cash may be inconvenient at times, wait until the week draws to a close. When you are stopping to pick up dinner for the whole family on the way home and you are thumbing through your bills only to find $8.00 you soon realize there is a problem.
The effects don't have to be so drastic though. Simply having a visual and physical reminder of how much money you have and how much purchases cost can have a significant impact on your spending habits.
When you switch back to cash you begin to again realize the true value of money which by instinct will create better spending habits. I personally do this for my lunches during the week and it has made a big difference.
You can try to determine how much you are spending during the week on lunch. Then using a set dollar amount per week to use for buying lunch, start the week with that amount of money in your wallet. If you don't spend wisely, you can end up eating very little for lunch but by using cash, you are forced to stick with your spending budget.
And if you run out of lunch money by weeks end, you can always brown bag it! So if you are always having trouble finding ways to meet your spending limits, try a week or two using cash only. For many generations all we had was cash and people manged just fine.
By going back to basics you may find that it isn't so hard to keep spending within your budget after all. Doing all cash may not work for you forever either. But this way, it gives you an idea of what you are spending and you can then customize your spending habits in ways that work for you. You can use your debit card only for certain purchases and cash for others.
by: Jack Landry
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