Do you have any financial goals for 2017? Think through this a second. What would life look like if you didn’t have any debt payments, if you outright owned your car? Your HOME? Well, if these are your goals, then read on for my quick and easy tip. But first, a sad TV commercial…
Don’t you love those ridiculous credit card commercials asking us, “What’s in your wallet?” Those commercials emphasize the “cool thing” is to have one of those super thick Chase credit cards! As if having debt is a status symbol. Oh, don’t get me started. Today, let’s start by answering a different question. Do you have CASH in your wallet?
Carrying Cash Instead of Cards
Many of you right now are saying “No way! I don’t have time for that!” I get it, cash is not as convenient, you’ve got to make a stop at the ATM, and plus, you don’t get all of those amazing fuel, travel or merchandise points when using cash. However, there are a lot of benefits for carrying cash.
Benefit 1: You Spend Less
Carrying cash gives you a better idea of what you are spending. Think about it. If you carry cash, there is a finite amount of it in your wallet. If you know you’re going to have to take multiple $20 dollar bills out of that wallet, you might think twice about buying that item! If you are using a debit or credit card? It doesn’t feel quite the same. You don’t see the money when you make the purchase like you do with cash. Research has proven that people spend less when they use cash versus a debit or credit card.
Benefit 2: You Become a Better Steward
When you are using cash, you will immediately start paying more attention to your bank balance and the other bills you are responsible for. You will see how much money is in your account, what bills are coming up, etc. It might even lead you to create a budget if you are not using one currently.
Benefit 3: You Will Begin to Say NO more
As you continue to carry cash only, and continue to pay better attention to your spending, you will naturally find that you say “no” more to purchases. Or you might look for coupons or deals for the items you must buy. Or you’ll not buy the Costco-sized toilet paper, but only for the amount of toilet paper you’ll need for this month.
Here’s a quick action for you:
- Plan out what amount of money you will need for groceries, eating out and entertainment for the upcoming week
- Total up that amount and go get the cash out of the ATM
- Place that money in different envelopes and label each envelope what the money is for
- Only use cash to pay for these purchases this week
- Tell yourself that if the money is gone from the envelope, that purchase cannot be made
Benefit 4: Reconciling is Easier
You’ll notice when you spend cash, it’s much easier to see where your money has been going. You don’t have five thousand different financial transactions flying in every second! Instead, you have been spending out of your envelopes, and you are in better control over your bank account as you notice the number of transactions is less, it’s easier to see the automatic deductions like utility bills, and overall makes your financial management that much easier.
What is your financial goal for 2017? Would you be willing to carry cash in order to meet it?