.png)
Have you ever noticed how easy it is to swipe a credit card without really thinking about it? It's a common problem, and it's costing people a lot of money.
Studies have shown that people tend to spend more when they aren't using cash. Why is that?
The Psychology of Cash
When we use cash, we can physically see our money disappearing from our wallets. This creates a psychological barrier that helps us control our spending. We're more aware of how much we're spending because we can see our money dwindling. With credit and debit cards, it's easier to lose track of our expenses.
Tips for Using Cash to Your Advantage
Carry only what you need: While carrying a lot of cash isn't the safest option, you can still benefit from using it more often. Withdraw only the amount of cash you need for the day and leave the rest at home. Keep a credit card for emergencies but prioritize using cash.
Set spending alerts: Many banks allow you to set up spending alerts for purchases above a certain amount or when your balance gets low. This can help you stay aware of your spending and avoid overspending.
Embrace prepaid cards: For those times when cash isn't an option, consider using a reloadable prepaid debit card. Load only what you need for a few days at a time to maintain control of your spending.
Wait before you buy: If you see something tempting, resist the urge to buy it immediately. Give yourself a 7-day cooling-off period to decide if you really need it.
Check your balance regularly: Get in the habit of checking your balance twice a day: once in the morning to plan your spending and again at lunch to see how much you have left.
The Bottom Line
By using cash more often, setting spending limits, and being mindful of your spending habits, you can take control of your finances. Remember, small steps can lead to big changes. Start incorporating these tips into your daily life and watch your savings grow!
If you have any questions or need personalized financial advice, our team would love to talk. Request an appointment and we'll be in touch.
Required Disclosure:
The material presented by David Peters in this interview is for informational purposes only, is general in nature, and is not intended to and should not be relied upon or construed as a financial plan or financial/investment advice regarding any specific issue or factual circumstance.
Financial and investment advisory services offered through Peters Financial LLC. Brokerage and custodial services offered through Charles Schwab Co. Inc., member FINRA and SIPC. Peters Financial LLC and Charles Schwab Co. Inc. are not affiliated. David Peters also offers tax services through Peters Tax Preparation & Consulting, PC. Peters Tax Preparation & Consulting, PC is not affiliated with Peters Financial LLC and clients or prospective clients are never obligated to use Peters Tax Preparation & Consulting, PC. as part of any financial planning or investment management services offered by Peters Financial LLC.
About the Author:
David Peters, CPA, CFP, ChFC, CLU, CPCU, CGMA, is the Founder and Owner of Peters Professional Education (petersprofessionaleducation.com) and Peters Tax Preparation & Consulting, PC. David Peters is also registered with the U.S. Securities and Exchange Commission (SEC) as an Investment Advisor Representative (IAR) with Peters Financial LLC. He regularly teaches courses in accounting, finance, insurance, financial planning, and ethics throughout the United States, and regularly contributes regularly to various professional publications, including NCACPA’s Interim Report, SCACPA’s CPA Report, and VSCPA’s Disclosures.
Comments