Tip #23 – Go cash only for 15 to 30 days
Using cash only forces you to be a conscious spender. Rather than blindly using your credit card and deferring whether it’s worth it or not until your bill comes using cash forces you to make that decision when you pay. When you withdraw money, you have to set an amount. Knowing what you started with and watching it dwindle motivates us to hold onto some of it. Consider using an envelope system. Basically you take out enough cash and put it in envelopes by category; groceries, clothes, household, etc… When/if the envelope is empty you’re done. If there’s some left in other envelopes, consider that savings. You’ll realize where you need to cut back quickly. Do this for a limited period of time, say, 15 to 30 days. The point is not to eliminate credit card use. If you use them responsibly they help you build good credit and many offer rewards as we’ve discussed previously. This just forces you to consciously notice where your money is going and adjust your spending going forward.