Do you use a credit or debit card for the majority of your transactions? Well, you might want to reconsider.
I’ve found the easiest way to save more money is by simply hacking your mind into believing you have less.
By believing you have less money than you actually do, you’ll end up spending less money.
Only spending cash is an easy money hack for making yourself believe you have less money than you do.
Why Use Cash to Save Money?
Swiping a card is easy.
An electronic transaction happens and you don’t have to think twice about the money you spent.
In contrast, using cash forces you to physically hand over dollar bills.
Psychologically, you feel a sense of loss or, in our case, of actually spending money.
By increasing the hurdle to spending money, you’ll inherently want to spend less.
Pro tip? Leave the debit cards at home and go to an ATM once a week to take out only how much money you want to spend this week.
Whenever your wallet or purse runs dry, you’re done.
When Not to Use Cash
Okay, so using cash to save money isn’t really for everyone.
It’s great when you’re first starting out and trying to develop good financial habits, but it can quickly become counter productive after a certain point.
Start by using cash until you have no debt and have built up an emergency savings account.
After that, it can be highly beneficial to get a rewards credit card. Points and cash back are a great way to create additional value for money you’re already spending.
However, credit cards should be avoided until you’ve developed the right habits and budgeting skills that will ensure you don’t end up digging yourself into a hole.
At the end of the day, spending cash is just one tool. To maximize savings you need to be attacking it from all angles. Income, savings, investing, etc
It’s not easy, but over the long run, it’ll definitely help you reach your financial goals easier and faster.