Lacking Discipline? Stick With Cash.
April 22nd, 2006 by Grant in: Budgeting
Debit cards are a wonderful thing. They make spending money much more convenient than carrying cash all the time. They’re almost too convenient.
Debit cards rid you of all that emotion when you’re asked to part with your money at the checkout counter. This lack of emotion, it turns out, is what get people into financial trouble.
According to an MSN Money article I just read, credit and debit card transactions account for 56% of all in-store purchases, with cash coming in at 33%. And due to the convenience of plastic and that lack of emotion when it comes to parting with your money, it’s no wonder many people are having financial woes.
If you think about it, back when checks were all we had (aside of cash, or course) you always knew how much you had in your account, as you had to enter the transaction in the register after you wrote each check. Balancing the checkbook keeps you informed of your financial situation while you’re in the store. The dawning of online banking makes it so easy to just assume you have the finances, and worry about the details when you get home.
If you stick with cash, you can never spend more than you have. I like the envelope system that the article describes, and I think it might even be good for my wife and I to try something like this. While we’re not really having budgeting problems, we could always do a better job of keeping track of our finances. Another advantage of cash is that you receive change from your transactions, which can be put into a piggy bank (or a 5 gallon water jug in my case) for a special purpose on down the road.
Something to think about anyway!
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