Okay, so now the next super simple step to having more money at the end of the month without feeling deprived is to start moving from plastic to cash. Switching more of your regular expenses to cash is very simple. In fact it is one of the simplest and most effective financial planning tools I have used on myself and with my clients.
Quite basically how it works is to take the plastic out of your wallet; your credit cards and your debit cards. Sit down Sunday night and figure out how much money you will need for the upcoming week. Expenses such as: gas, transit, parking, groceries, school expenses, lunches, coffee, kid’s allowances, etc. Then use cash to pay for everything.
This works extremely well for most people for a variety of reasons. Firstly, you can’t overspend. If you don’t have the cash you can’t spend it. By not having the very expensive plastic option we are forced to be very conscious of what we are doing with our money. Secondly, a lot of people really don’t think of plastic as money. “I’m running a little low on money so I’ll just put it on my credit card” puts people into very expensive debt faster than they can say “Charge it!” Thirdly, when people are forced to hand over a $20 bill rather than a ‘faceless’ debit or credit card, they slow down a bit more to ask themselves “Do I really want this?” Many people have found that they won’t break a $20 to buy a coffee where if they were tossing it onto a debit card or credit card without even thinking before.
Another modification that can help is to only get $50 bills from the bank (and some bank machines will dispense $50s). Handing over a pretty red bill is more challenging emotionally than a normal green $20. By taking all the coins you get back in the form of twoonies, loonies, and smaller and putting them into a jar for say a vacation, large, fun purchase, or to pay down a credit card debt you put yourself on the path to debt freedom faster with virtually no effort.
Success in all areas of life is made up of taking small, positive steps in the right direction day after day after day. Try trading cash for plastic in your wallet and see the positive changes you can make without really trying.
“Security depends not so much upon how much you have, as upon how much you can do without.”