Your budget is all written out for the month and you are raring to go! And that is great! Way to go! Now you just need to keep those numbers on target. And here is the number one trick for staying on budget- pay as much of you can with cash.
Now you might be thinking, “Really? It’s so much easier to use my debit card. I don;t have to worry about losing my cash, keeping track of where it went, not having enough, and so on.” But what you may not have realized how easy it is to just swipe that debit card then wonder where all the money went? Pretty Darn.
But the magic of cash? You can only spend what you have. If the total of your purchase is 130.00 but you only have 125.00 in cash, you can’t over spend.
Now there are some people that may say “But if I have cash I am going to spend it!” Which is probably going to happen if you are not using a budget. If you don’t have a plan there is nothing to hold you back.
For example, my son is the classic example of cash burning a hole in his pocket. Give him a dollar and he is going to ask to go to the Dollar Store. UNLESS he know what he is going to do with the money that he is earning. When he is reminded of college expenses, trips he would like to take, those fancy basket ball shoes he desperately needs for school, he suddenly becomes mindful of every dollar that comes his way and his spending suddenly drops. He then becomes focused on taking care of his money. The same is true for anyone.
If you know that $350.00 sitting in your wallet is for groceries and you have another three weeks left in the month, chances are you are not going to blow it on shoes or fishing gear. You would have self-control because you want to be able to provide food for the rest of the month.
Having to pay cash for an item does something to you. There is a reluctance to let go of that cash. You second guess if the purchase you are about to make it really necessary. Is that extra item or two at the grocery store really going to go into your cart if you are paying with cash? Probably not. Because you have the cash in hand and can actually see it leaving you. Which can be pretty painful.
Some ideas when using cash to stay with your budget:
- Use cash where every you can. Gas, groceries, clothing, toiletries, entertainment anywhere you can use cash. Not your card.
- Make sure to have your cash divided into separate categories. If you just have a pile of cash in your wallet, chances are you are going to spend it in the wrong area. I like to use paper clips to separate my cash into separate categories and label them with sticky notes. If you use a planner individual, labeled plastic pouches can work. Brown accounting envelops, what ever works for you.
- Make sure you keep track of your spending. Like your debit card spending, cash also has to be kept track of. Every time you make a purchase, write it on the envelope/sticky note/budget paper so you know how much how much is left in that category.
- Left over money? Carry it over to the next month. If I have extra money in my clothing budget, I keep it in that clip and let that pile grow. That way when I do need to make an larger than normal purchase I already have the cash.
So where every you can, start using cash. It may take some getting used to but will help so much in getting your fiances under control and your debt out of your life.