This posting is actually in response to one of the comments left on the Jane Quinn posting by James earlier in the week. Brad, one of our regular readers, made the observation that cash can tend to slip out of one’s hand. While this all depends on the person and the situation, I think this can certainly be true.
From what I have found, using cash works best when you apply a couple of principles.
It’s better to start with more money than less, yes you heard me right. I’m an advocate for looking at your budget, giving yourself a weekly allowance and then taking it all out in one lump sum.
What this does, are a couple of things.
- First, you see how much you really intend to blow in a week on groceries, eating out, and entertainment.
- Second, you can see what the total amount for all expenditures should be and then allocate accordingly.
- After blowing through your weekly allocation you’ll be less likely to want to splurge on anything else.
- Lastly, if you have money left over at the end of the week you’ll be feeling pretty good.
What you should NOT do, is take out $20 bucks out of the ATM and pretend like you aren’t going to spend any money. Chances are, either you’ll be grabbing the plastic in no time, or you’ll be back to the ATM.
If you are interested in testing the use of cash, you might want to start with a specific area like entertainment, eating out, starbucks addictions, or misc expenses. These are likely areas that we would all like to reduce our spending on. Having an awareness of what is in your wallet might just work.
Readers: We’d love to hear what works best for you – paper or plastic?
Cheers,
Miel
DINKS (Dual Income No Kids) Finance is a blog discussing personal finance for couples. While by no means financial experts, we own a variety of assets including real estate and stocks. We've both been up to our eyeballs in debt and have made tons of financial mistakes. However, we've both successfully retired that debt and we both do learn from our failings. We hope that our voice in this blog can help others in achieving their goals!
