For many of us, it has become routine to pay for daily expenses with a credit or debit card. For all intents and purposes, it’s faster and sometimes more convenient, but also comes with the risk of spending more than anticipated. The idea of using cash only has been proven to actually save money in the long run.
Switching to a cash only lifestyle for daily expenses such as trips to the grocery store, buying gas, daily purchases other than food, and any other items has been proven to save you money.
One of the reasons to switch to cash is that you are aware of exactly how much you’re spending and what it’s being spent on. There have been studies showing the psychological reaction that comes with handing over cash from your hand to the merchant that gets a different reaction from our brain than routinely swiping a credit card. This also helps decide whether what you’re purchasing is really necessary.
Americans pay billions in card related fees every year. Using cash helps avoid interest feel as well as those accidental overdraft fees when accidentally forgetting to record a transaction on a debit card. Unless you are strict about paying off the balance on a credit card each month, you are paying interest on something as simple as a burger and fries for lunch. It doesn’t seem like much until you put it into long term spending. Just think of how much interest you’d be paying for those lunch items over a year’s period of time. It can really add up!
Adopting a cash only lifestyle can take some adjustments in daily routines. Trying it for a month or so to gauge your spending can have a profound effect on your finances. Seeing your cash leave your hand and be placed in the hand of a merchant shows exactly what is taking place and has a tangible effect on your spending. Try it out!
“Never spend your money before you’ve earned it” ~ Thomas Jefferson