Using Cash Could Help with Spending It’s no surprise that using plastic is becoming more popular every year.  With that being said, it’s also no surprise that the amount of debt the average American carries with them is on the rise as well.  Even though using credit or debit cards are sometimes the most convenient method, it often leads the spender to frivolous purchases and poor tracking of one’s budget.  When you don’t see the actual changing of money between hands, the value of that money can start to drop, therefore, leading to spending outside of the boundaries. With a cash budget, you have the advantage of actually seeing the money you have allotted for spending decreasing with each purchase.  This can cause the spender to have a second thought about a purchase that may not be necessary.  Being aware of how much you have spent and how much is left to spend every time you look in your wallet is sometimes all a person needs to realize that their spending has become unwarranted. Using a method called the “envelope system” has worked with numerous individuals having problems with overspending.  Once you’ve figured out your budget for the month (or week), use different envelopes and allot cash for each of your discretionary accounts.  An easy way to think of it is if you can eat, drink, or wear it, then you should use cash for it.  That way when the envelope runs dry, the new sweater or espresso you were going to purchase might not seem so necessary anymore. At the end of the day, if you’ve tried and were successful at cash budgeting, it could be beneficial for you to stick with it for a while.  If you resort back to the “plastic system” because carrying around lots of cash makes you nervous or getting cash from your bank is too inconvenient, remember to take with you those lessons learned from actually watching your green go away.

Helpful Information Planning Your Budget

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