Many people are all too familiar with the ease and convenience of spending with debit/credit cards. One swipe, no bills or coins, and a spending trip made quick and easy. What many people don’t consider is how quickly their spending can add up using this method – and without even noticing it.
A simple and efficient way to avoid overspending and gain control over your finances is to use the “All Cash Diet” method. While this approach may seem intimidating, and possibly even unrealistic – you’d be surprised at the difference in your spending when your money is most tangible. If you strive to meet those daunting financial goals and avoid draining your well-earned savings – the “All Cash Diet” may be your answer.
[I recommend that you commit to the “All-Cash Diet” for a minimum of 60 days]
This requires using only cash from your paycheck for bills, expenses, and spending – rather than keeping swiping the convenient plastic known as credit/debit cards. For those that prefer to pay bills electronically – you should consider ACH transfers for recurring payments and use cash for all other expenses or spending.
Here are 7 tips to get you started:
- Learn your habits.
Take a look at your most recent monthly checking account statement. How much did you spend on food, household items, entertainment, etc.? You may notice that how frequently you spend money is more shocking than the amount you spend. The convenience of that local Starbucks, or even a spontaneous Walgreens run will add up to be a lot – very quickly too! How is this affecting the rest of your finances throughout the month? Struggling to make it to the next? This could be why!
- Afford what you want.
Of course, we have bills and the occasional chiropractor appointment. Don’t forget the overdue cut and color! Maybe you need some new running shoes for that 5K you’re preparing for. Sure, we all love to have a night to relax and treat ourselves. You CAN afford the things that you want – you just need to budget for them. Setting aside money, especially when you can psychically see it, can help you see things more clearly and prioritize the things that you want to. Side note: A good way to organize your money is to keep your cash for monthly bills, groceries, luxuries, etc. – in separate envelopes. An alternative for those who prefer to do things electronically would be to transfer money for bills, groceries, and spending into a separate account. This way, you aren’t tempted to spend directly from your checking account.
- Become friends with your bank.
You should withdraw or transfer all the money necessary to cover your monthly expenses every two weeks or every payday. Now would also be a good time to set aside some money for your savings. Going into the bank rather than using an ATM can help you hold yourself accountable. Frequent personable interactions with the tellers can also create the opportunity for any questions you may have had – and couldn’t ask an ATM. Besides, who could pass up a free Dum-Dum sucker?
- Make lists for purchases.
Instead of walking into Target with an empty stomach and no plan on what to get – you should make a sandwich for the drive and write down a shopping list. As boring as it sounds, you will thank yourself later. I can’t tell you how many times I’ve walked into the store with a few things in my mind, and $300 later I’ve come out with everything BUT that. Being more prepared and structured can save you a pretty penny. Having the cash will put in perspective just how much a hungry grocery trip can cost you!
- Determine your financial goals and priorities.
Do you have difficulty saying no to those social events with friends? A weekly Sunday brunch, or the occasional night out on the town? We all know that those fun, in-the-moment expenses seem to take a toll when you look at your bank account the next morning. When you prioritize your balance of spending vs saving, you can have fun and still have money left. As adults, we all understand that life is expensive. It is understandable AND respectable to have fun but also set your limits too.
- Value your luxuries.
It’s a given that we all deserve and need to treat ourselves every once in a while. Maybe your favorite store has a cute purse on sale right now. Or maybe you could use a massage from the strenuous week you just had. Using cash can help you decide what you value most. Maybe it is your appearance, your health, or your spontaneous monthly treat-yourself gift. The All-Cash Diet can help you learn better self-discipline – which is not a bad quality to have!
- Remember your “WHY” and improve your habits moving forward.
Looking back at the reason you clicked on this “All-Cash Diet” article to begin with. Are you looking to pay off debt? Maybe you want to cut back on those monthly spending trips. Or maybe you’d just like to start building savings. There is no better time than now to grow financially and build a stable foundation of wealth. Knowing and seeing where your money goes allows you to take control of your finances before your finances take control of you. Keep track of your spending, make note of your goals – it is all possible. Things can only go up from here!