Another big step to take is eliminating unconscious spending by using cash instead of debit or credit cards. Your tracking sheet shows you how much money you need to have in cash each week--groceries, clothes, entertainment, grooming, and incidentals should all be paid for with cold cash.
Make it a weekly habit to go to the bank and withdraw the money you will need for these purchases. Ask for smaller bills, like $5’s and $10’s. Once you get home, divide it up and put it in labelled envelopes or jars for each category. If you spend all your entertainment money in one night, you have to accept that you don’t have anymore until next week.
Spouses find that this system can eliminate unpleasant arguments about money (cited as the leading contributing factor in over 70% of North American divorces). If one of you likes to spend your entire discretionary fun money in one go while the other prefers to dole it out over the week, there is no problem—as long as the quick spender accepts responsibility for his or choice of spending and doesn’t ask for more money. Maybe you want to create a date night category, so that you can go out together without worrying about whether you’ve spent your personal money for the week. If you don’t spend it one week, then you can have a more extravagant date the next week.
By paying in cash, you train yourself to stop the unplanned purchases that destroy financial health. Even for big ticket items, you’ll want to pull the money out in advance from the ‘big ticket’ savings account and take it along with you to the store--you might even get a cash discount! But if you don’t bring your debit or credit card, then you won’t be tempted into spending more money than you planned to. Unplanned spending is one of the ways you probably ended up in financial trouble.
IN THIS SECTION
|
