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Cash is King

Written By: admin on October 2, 2009 No Comment

There is one easy thing that you can do to prevent overspending and keep your inner peace and that is using cash instead of credit cards. Once upon a time when there were no credit cards people spent only what they had and when the cash ran out they were left without any money. Credit cards are a trap because they allow you to spend money without boundaries and it seems as if you can afford everything that you want for as long as you have a limit. If you have a serious problem with self constraint, you should try using only cash and help yourself using some little tricks:

1. Envelope budgeting

When you plan for the month ahead, dedicate envelopes to certain groups of expenses. Fill them up with cash and when you’re done – that’s it! For serious over spenders, this is a great tool, because empty envelope is a protection from overspending and enables you to really get true meaning of budgeting. For those that are computer savvy, you can use a computer program which enables envelope budgeting. These programs use virtual envelopes but should be taken equally serious. For instance, there is PearBudget Web-Based Budgeting Software, look it up and try for yourself.

2. Avoid late fees, interest payments and various charges

Cash comes with no extra costs. Credit always makes money for the banks and takes it right out of your pocket.

3. Everybody loves cash

As opposed to credit cards, which might not be accepted in some places, cash is always gladly accepted.

4. Negotiation possibilities

It is always easier to negotiate a discount if you pay with cash!

5. Notes and coins have value

On a psychological level there is one simple truth. Piece of plastic as such has no value and therefore it is easy to forget about the money involved and instead just hand it over and pile up the debt. When you are giving somebody notes and coins it makes it harder for you to give them up, since you can clearly see the value attached to them.

To cut the long story short – credit cards and budgeting are not best friends!

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