Shopping with Cash
I’ve found that the best way to begin a financial planning session is with spending - we’ve got much less control over the incoming than we do over the outgoing. The first step in controlling spending is learning to say no to yourself, and not to buy on impulse.
That’s a difficult thing to do in today’s world where instant shopping gratification is available through the Internet, credit and debit cards. We’re so used to on-line and plastic payments that we often don’t even recognize when we’re spending money: It’s too easy to do so.
When I find my spending getting out of control I like to do an exercise for a week or so where I only pay cash for things. I find that making myself use cash for all my purchases forces me to plan: I have to go to the bank to get the money, I have to make sure I’m carrying enough for everything I need, and I can’t make impulsive purchases because I might not have enough left for the essentials.
In addition to the administrative work of paying in cash, I find when I actually have to count out bills and coins I take better stock of what I’m buying, and whether or not I really need it.
Try it for a week. I can guarantee that you’ll find yourself taking notice of the many impulse purchases that you make every day, and how they add up.