How to Live on an All Cash Diet to Take Control of Your Finances
We all do our best to budget responsibly and live within our means.
Yet all too often we overspend.
Because it has become so easy to part ourselves from our hard-earned money.
We can make debit card payments with just a flourish of our cards.
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We have access to all kinds of credit, with promotions designed to lull us into thinking that our bank managers and credit card companies are our friends.
We can spread costs.
We can buy now and pay next year.
We live in an age where we’ve come to accept debt as the cost of convenience.
But we stand a much better chance of taking control of our finances when we switch to a spending diet of cold, hard cash.
How the All Cash Diet works
An All Cash Diet means you live your life spending nothing but cash.
No credit cards, no deferred payments and no credit of any kind.
This helps us to get a clearer idea of how much we have to spend in our monthly budget, and how much we’re losing with every transaction.
It helps us to better keep track of our finances and prevent all those little spends that soon erode our balances.
Here are some tips to make sure that you get it right…
Start with planning and budgeting
It goes without saying that you need to start out with careful planning and budgeting for the month.
Only when you know what you realistically need to spend to survive can you ascertain how much cash to allow yourself for the month.
You might need to make the odd cut here and there to make everything fit.
But hopefully this will illustrate how you’ve been consistently deepening the debt hole month by month.
Allow for exceptions where cash can’t be used
You probably won’t be able to pay your mortgage or utility bills with cash.
And that’s okay.
In this digital age, it’s simply not convenient for many businesses to deal in cash.
Just deduct these expenses from your budget accordingly.
Establish your priorities
Credit cards, debit cards, Paypal and the like can all obfuscate what we really need to spend our money on.
They make it quick and easy to spend on non-essentials.
However, when paying with cash, it’s much easier to prioritise your spending.
When you have the essentials covered and still have a little left over, you know that it’s working. Just…
Be careful with your cash
You’ll start every month with a huge wad of cash.
And that can be intoxicating!
Be mindful of your cash and how long it needs to last you.
You will also need to learn to be more careful in terms of where and how you store your cash.
Avoid putting a months’ worth of cash in your wallet, as this can be extremely risky if your wallet should be lost or stollen.
Start making records (and keeping them up to date)
We’re guessing you don’t want to keep having to count your cash over and over again.
But in lieu of a bank or credit card statement, you’ll need to keep track of how much you’re spending on a daily basis.
Keep a little notebook and get into the habit of logging every penny you spend in it.
Making records and keeping them up to date can be a huge step in improving your financial transparency.
Set a little aside for emergencies
You never know when unforeseen expenses may rear their heads.
Unless you have robust savings, you may have no choice but to incur more debt.
Which is why you should set a little aside every month for emergencies.
You’ll never have to pay interest on your savings, after all!
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