A big part of conquering your debts and achieving financial freedom is understanding what led your debts o get out of control in the first place.
For decades now, we’ve enjoyed low interest rates and easy access to forms of credit that simply weren’t an option for previous generations.
But the easier it is to get access to credit, the harder it can be to live without it.
As such, we can get into the habit of piling new debts on top of old, and losing more and more of our disposable income to interest payments.
In order to live debt-free, you need to break the cycle of relying on credit and taking on more debt.
And that means learning to live on cash.
Even when your debts are a distant memory, you’ll still find that living solely on cash makes it easier to budget and reign in unnecessary expenses and impulsive spending.
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Withdraw a set amount every month
It’s all-too easy to spend recklessly, or even unconsciously when all it takes is a wave of your debit card in front of a sensor to separate you from your cash.
However, when you withdraw a set amount of cash from your bank account every month, that is finite.
You can’t go back to the well for more.
And this encourages you to think twice before spending.
You’ll be less swayed by the allure of sales, and less likely to make the small impulse purchases (like takeout coffees, fast food lunches etc.) when you’re dealing in cash.
Use a household budget template
A household budget template is always a good idea for helping you to identify areas of wasteful spending and take control of your finances.
It encourages you to identify how much you have available to spend every month, week and day, so that you think much harder about where that money goes.
Understand which expenses cannot be paid in cash
Of course, not all of your expenses will be able to be paid in cash.
Your landlord, mortgage provider and energy supplier, for instance, will usually take their payments by direct debit.
But that’s okay.
Factor all of this into your budget and you’ll be able to make do with what you have, knowing that the essentials are already taken care of.
Track your spending
Every expenditure matters.
So keep a diary of how much you spend and where it goes.
Even if it’s just a few dollars.
The better you’re able to track your spending, the less likely you’ll be to spend recklessly.
Nobody wants to log an impulse purchase in their diary.
Debts still getting out of control? We’re here to help!
Even if you learn to live on cash, your debts can still dig significantly into your disposable income and keep you from living your best financial life.
Since 1999, we’ve been helping Canadians from all walks of life to find the right debt relief options to reduce interest, waive charges and pay down their debts faster.
Want to know more?
Call us on (877)879-4770.
We’ll be more than happy to schedule a call-back with zero obligation and in complete confidentiality.
And free of charge, of course!