How Spending Cash Can Save You Money!

One straightforward way to control spending on discretionary, personal items is to give yourself an allowance, just like a twelve-year-old, in cash. Then, when it’s gone, it’s gone.

The following guidelines will help ensure that this principle applicable for controlling spending.

1.  Define what the money is meant for and what it does and doesn’t cover. For instance, you may decide that your allowance covers lunch but not dinner or snacks at the movies but not the theater tickets. Presumably, you’ll use a debit card or credit card (or write a check—does anyone still do that?) for expenses not included in your allowance. You have to be honest with yourself about this and with your spouse! You don’t want to have a fight mid-month when the cash runs out over what you spent it on.

2.  Define uses of cash narrowly. If you use the cash for a variety of purposes, you’ll have a much more difficult time tracking where your money goes. Credit cards seem to offer the best automated tracking of purchases and are typically reported in real time. If want to keep track of your cash, you’ll find your wallet fills up with receipts in a big hurry.

3.  Define the time period that the case covers. Depending on the convenience of getting to the ATM (and whether you need to be given a few there) you’ll want to decide how often you’ll go pull out some cash for your allowance. Your rule should be easy to use, for instance, once each month on the same day, twice monthly on the 1st and 16th, or every Monday morning. Design a rule that will work for you.

4.  Strictly avoid using cash for things it was not designed to cover cover. If you’ve decided your allowance money doesn’t cover dinners with your spouse, when you’re out with him for dinner, use your card to pay for dinner. If something comes up where you have an obligation to use some of your precious cash for something outside the plan, keep the receipt and pull out some extra money for that purpose.

5.  Do not forget to inventory your cash periodically. If you are on a prearranged plan, you’d hate to have your allowance all gone before the end of the month. Check to make definite what’s left!

6.  When go out, stop spending. If that means taking a sack lunch to push for a few days at the end of a month, so be it. Allow yourself to suffer the natural consequences of over spending.

7.  Feel free to treat yourself with the surplus at the end of the month. If you do hire a good job and have money was still, reward your discipline with a treat, whether that is an ice cream cone or a new top of the Gap, enjoy your just reward.

Needing to find out a way to limit spending and to develop self-discipline will empower you to save more and build a future for yourself that is safe and secure.