Getting into too much debt is never a good thing. You need to have sufficient savings and the ability to pay your bills with money left over each month. If you have too much debt, is it a good idea to completely ditch the credit cards for a while? What are the odds that sticking to using cash exclusively will help you change your financial outlook?
Cash Helps You Control Your Spending
Using cash is a good idea because it will help you set limits when it comes to your spending. When you run out of cash, you are no longer able to purchase anything. You also give yourself the opportunity to set limits that may be below what you have in the bank. For example, you could bring $20 to the grocery store when you go shopping. This forces you to budget when you are buying food for yourself this week.
Using Cash Causes An Emotional Reaction
Having to physically give someone your money causes you to think twice about spending it. When you use cash, you actually see your wallet getting emptier and emptier each time you make a purchase. Seeing your money leaving your possession gives you a better idea of just how much you are actually spending on a regular basis. As time goes on, you will see that you start to make better decisions with your money or at least thinking longer about actually making a discretionary purchase.
You Have To Plan For Fees And Other Expenses Related To Using Cash
Going to the ATM to take money out requires that you pay a fee. This fee can be as high as $3 or more. If you are relying on cash exclusively, you may decide that spending money at the ATM is simply a waste that you don’t want to deal with. What this forces you to do is plan your trips to the ATM. Maybe you decide to go to a credit union that allows a certain number of free withdrawals each month. This will further force you to budget and make sure that you take out all the cash you need at one time.
Opting for an all-cash diet is something that you should seriously look into. It will cause you to spend less, will force you to learn how to budget and will cause you to understand how much it really costs to use your own money. Best of all, you don’t have to pay interest when you use cash. If you are in a debt crisis, ditch the credit card and switch to cash today. It will be the first step on the way to living debt-free.
About the Author
Carly Lance thinks of herself as a personal finance junkie and loves to blog about saving money, frugal living and getting out of debt whenever she can. She believes a happy life = happy finances. Carly is also employed as a blog manager by Personal Bankruptcy Canada, a company dedicated to helping “good people with bad debt,” with whom she also blogs about finances for.
No Comments