Video:How to Use Cash to Limit Spendingwith Kaytie Sproul
If you have a hard time saving money, or spend more than you can afford, using cash to limit your spending could work for you. Here are a few ways to use cash to limit your spending and save money.See Transcript
Transcript:How to Use Cash to Limit Spending
Hi, I'm Kaytie Sproul, here for About.com, and today we're going to talk about how you can use cash to limit your spending, using information from About.com's Financial Planning site. While the convenience of debit and credit cards makes spending much easier, it also makes running up debt and depleting your savings a likelihood.
Make a Weekly Budget
If you want to get back on track, consider the following: The first thing you'll need to do is sit down and write out a weekly budget. The budget should include everything you'll be purchasing that week, for example: groceries, gas, lunch out with co-workers, or daily coffee stops. You need to know exactly what you spend each week in order to have that amount of cash with you come Monday morning. As the week begins and progresses, only use the cash in your wallet to pay for what you've budgeted, and hold on to your receipts.
Check Your Daily Spending Against Budget
At the end of each day, count what cash you have left and review the receipts against your budget. Are you only spending money on the things for which you budgeted? Are you on track to be flush at the end of the week, or will you run out of cash by Thursday? By reviewing your expenditures each day, you can adjust your spending accordingly. Perhaps you've been making additional purchases you can do without, or you didn't realize how much you were actually spending each week when you sat down to create your budget.
Limit Spending Based on Budget
If cash is looking tight after a few days, it might be a good idea to skip eating out and pack your lunch instead, or cut out the five dollar lattes. If having an entire week's worth of cash is too much temptation, you can divide the cash into daily allowances. Putting each day's allowance into an envelope, and only taking that amount with you each morning, will ensure that you don't burn through your budgeted amount several days before the new week begins.
Leave Credit Card at Home
Finally, you might find that you can stretch your cash quite far by leaving your debit and credit cards at home. Removing that safety net will likely keep you from making unnecessary purchases or over-indulging on certain things. You certainly don't want to put yourself in a dangerous situation, but if you keep blowing through the cash in your wallet and exceeding your weekly budget, not having a back-up could be all the motivation you need to limit spending.
In this age of convenience, overspending is easy to do. Using cash to curb bad habits is a great way to cut out the excess and keep your finances in check. Thanks for watching. To learn more, visit us on the web at About.com.