Cash Plan: Why curbing spending starts with cash in hand

Saving money often hinges on how you view credit, borrowing money versus using your own money.

Taking that philosophy one step forward centers on the latter, and specifically how you use your money.

Take for instance something as simple as a vacation, trip to a theme park or anything that you know ahead of time is going to cost you money on a day to day basis.

Either one of those examples might be something you budget out, but often overlooked is how you spend your money for the entire time you’re on this trip or that day out riding rollercoasters and eating cotton candy.

The cost of the vacation (flight, rental car, hotel) or the theme park (cost to enter park) might be on your budget but what about cost of food, games and other activities that might not have figured into your line item.

So while you might have money set aside for the bigger picture, it’s the small, somewhat incidental spending that sinks your ability to enjoy yourself without overspending.

That is, unless you start using your money smarter, leave the debit card at home and stop swiping and simply carry cash.

The cash on hand method means that you give yourself a daily allowance, whether it’s a daily allowance the entire time you’re on vacation or if that day at the park is going to mean cost over and above simply getting through the doors.

Think of it as a daily budget you give yourself, which includes having only as much cash you’ll need for food or the things you absolutely need to have. Once your cash is gone, then that means you’ll just have to enjoy the scenery of the beach or walking around the theme park and riding the rides or partaking in whatever is included in your ticket price.

The flip side to this is wheeling and dealing that debit card, swiping at will and racking up a bill that is only going to be more difficult to swallow when you actually sit down and tabulate the total. Sure, the debit card is your own money, and it’s certainly better than swiping a credit card, but you still shouldn’t give yourself free reign to spend.

Swiping is just too easy; you don’t think about what you’re spending until you log on to your online banking and realize that instead of taking $50 out for the day, you’ve just spend three times that much.

Having cash and using it as an “all and then nothing” proposition works, and will keep you from overspending and thus help your efforts to have fun and save in the same breath.

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