Using Cash to Stop Overspending and Stay on Your Budget

One of the most forgotten ways to stay on budget is also the easiest; using cash for all of your purchases. It seems simple really and even a little outdated but the fact is that many people have lost sight of the actual worth of their money. With credit and debit cards so easy to get and to use the temptation to overspend can be very high, especially when a lot of credit cards give ‘cash back’ rewards for using them.

The fact is, physically handling money and having to give it to someone for your purchase is much different than swiping a credit or debit card. The problem is that with plastic you don’t see exactly what you’ve spent until the end of the month when you get your statement (unless you check every day which you certainly can do but most don’t).

So as your week goes by you spend on groceries, morning coffee, gasoline, lunch with the gang, drinks after work and maybe a night at the movies.  Doesn’t sound like much and, as you’re purchasing, doesn’t look like much either until that statement comes and your eyes pop out of your head.  Most times the amount you spent is much higher than you thought and may even have put you over the edge as far as your spending limit.

When you use cash, however, you see the effect that your purchases have on your money each and every time that you buy something.  If you start the week with $100.00 you can actually see as it goes to $92.00 and then to $81.00 and then lower and lower as the week progresses. Each time you reach for your wallet or purse you’ll be acutely aware of how much you’ve spent and how much you have left to spend.

One way to see how this can help you is to actually force yourself to do it for a week.  Use your budget (you do have a budget, yes) to determine how much you can spend and take that amount and that amount only with you for a week.

By the end of the week you should know where you stand.  If you made it to Sunday with some cash left good for you.  If not now you know what you need to do to curb your spending.


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