When you’re trying to avoid impulse purchases, I often recommend putting away your credit cards and paying for everything with cash.
While I do believe this is the best way to prevent overspending for most people, it simply does not work for me, personally.
When I have a bunch of cash in my wallet, I’m likely to spend it much easier than taking out my credit card to pay for something. For some reason, watching actual cash being spent doesn’t bother me as much as charging something to my credit card.
I have been very disciplined with my credit card use for the last 4 years and actually try to use it for every purchase that I need to make (to get cash back). I pay off my bill in full every month so I never have to pay interest.
The times that I do have cash on me, I find reasons to spend it.
– Oh, only $2 for a coffee? That sounds fabulous!
– $5 for 2 boxes of almonds from the boy outside the grocery store? Sure!
– Elliott wants to ride the mechanical horse in the mall? That’s cute… here’s $1!
I don’t know what it is about cash, but I just can’t seem to hold on to it very long – and that’s why I prefer to shop with credit.
Before I had a credit card, I would go to the bank all the time to take out cash. That cash would be spend on who knows what, but I am certain it wasn’t on necessities!
I am confident that I don’t spend more using credit than I would with cash only.
Where I Use Credit vs Cash:
Here’s what I often use my credit card for:
When I do use cash, it’s usually for these:
– Craigslist or Kijiji Purchases
I do strongly believe that using cash is the absolute best way to avoid overspending for MOST people. I am just not one of those people.
Paying with credit only works for me, but it may not work for you.
If you are constantly overspending on your credit card, consider switching to cash only for awhile to see how you do with that method of payment. You may find that you spend much less when you only have cash to spend (or, you may spend more, and determine that credit only is best for you).