As the new year rolls around, many of us decide to enrich our lives in numerous ways. As many of us venture towards a life of salads and gym memberships, we tend to forget about our fiscal resolutions. Dieting can be quite an expensive lifestyle change. Luckily, there’s a diet out there that can kick-start your money resolutions!
[Read: Ways to Save Money with Smart Shopping Tricks]
Why You Should Outlaw Credit and Debit Cards
We are lucky to live in a society with easy and secure access to our money through the use of credit and debit cards. We’re even given register books to manage the amount of money that goes in and out of our accounts on a daily basis. However, most people are forgoing the hour long process of jotting down every receipt in their wallet in favor of online transaction summaries that most banks provide. Debit and Credit cards are great things, don’t get me wrong. But, let’s be honest, it’s a lot easier to lose track of how much money you spend when you can’t visually see a wad of money slowly disappearing inside your wallet. Losing the credit and debit card is the perfect way to kick-start your money resolutions.
Here is a list of several reasons that switching to cash can help kick-start your money resolutions
- You can actually see how much money you spend if you use cash
- You can’t go into debt or procure pesky overdraft fees
- You can learn how to budget better (you can’t spend cash that’s not there)
- Using cash instead of card can sometimes get you better deals (think, gas prices)
- There are some things that you can’t use a card to pay for
- Some card types aren’t always accepted at places
- You can avoid a lot of stressful disagreements with the bank-folk
How to Begin the Change to Cash-Only
The first and probably most important step is to set a budget for yourself. I say this is the most important step because without learning how to budget your money, you’ll soon fall into bad money habits. The easiest way to budget is to jot down a list of your weekly and monthly expenses and how much money you have to pay for them. Keep in mind, a good budget always ends with a surplus value. For those of you who are new to money managing, budgeting is actually really simple and is a key element to kick-starting your money resolutions. And luckily, we live in an age where there is a plethora of great money managing tools that can be accessed from our phones and computers, most of which are free to use.
Any diet will tell you to be mindful of when and what you eat. Well, the same rule applies to managing your money. Mindful spending is very crucial to kick-starting your money resolutions. Using cash requires you to focus on your budget and how to wisely spend to pay for the things you need. Luxuries might need to be nixed in order to pay for important things such as food. However, there is room in everyone’s budget for a little comfort. The success to mindful spending is all about your budget. Cash helps train a lot of people to embrace mindful spending as it gives people a visual as to how much they are actually spending.
There are Some Exceptions
Now, there are moments when we need to pay things that cost quite a bit of money. In these cases, watching out for individual safety is very important and is crucial to kick-starting your money resolutions. Therefore, when a situation requires us to spend a bit extra, it is smart to have a credit or debit card handy.
Such instances include…
- Car repairs (which are rarely ever cheap)
- Buying furniture
- Paying substantial loans
- Moving to a new home
Though there are plenty of instances where it would be safer to use a card instead of cash; however, we have to remember to embrace the concept of mindful spending, lest we fall back into our same old money habits. As a rule of thumb, if it cost more than $150, first decided whether or not you need it, then use a card if you do.
[Read: 7 Faulty Financial Resolutions for the New Year]
A Word of Warning…
Switching to cash-only is an awesome way for you to kick-start your money resolutions. However, just like with everything in the world, there is a downside. While using cards, we often forget about how real our money actually is. If we lose or damage our cards the banks can easily get us a new one. A piece of plastic with a magnetic strip is a lot less heartbreaking to lose than actual cash. If you go to the bank trying to explain that your forty dollars flew away and that you need another forty, they would probably laugh and show you to the door. Always keep a watchful eye on your cash. Money becomes a lot more real the second you don’t have it. Along with mindful spending, having a secure place for your cash is always a smart idea.