Does Using Cash Help Save Money & How to Do it
No one enjoys spending money, but everyone likes buying things. Only a few years ago, cash was king. But then came Paywave, which made electronic transactions even easier than EFTPOS. Add to this the rise of ‘tap-and-go’ payments and it’s harder than ever to avoid impulse buying. It can also make tracking spending difficult, even for the most diligent of us. There may actually be benefits to getting reacquainted with cash. You might even wonder, does using cash help save money? We think it does. Using cash can help you control your spending, save money and even help you pay off your small personal loans. Read on to learn more about using cash to save money.
Overview:
- Why do we spend more with credit or debit cards?
- Does using cash help save money?
- Using cash to save money: 5 tips
Why do we spend more with credit or debit cards?
Think about the last time you spent a substantial amount of money. Perhaps it was a comprehensive grocery shop or a glamorous new outfit. Imagine actually diving into your wallet and extracting every single dollar to pay for it, whether it be $100, $200 or more.
With the introduction of ‘tap-and-go’ payment methods, it’s so easy to part with your money because you’re not physically aware of the money leaving your possession. A one-off $4.50 ‘tap-and-go’ payment for a cup of coffee doesn’t seem like much, but to do it every day, seven days a week, 52 weeks a year, can end up costing you thousands ($1638 per year to be exact).
While using your credit card or even your phone to pay for things is super convenient, it’s probably not that helpful for your long-term savings goals.
Does using cash help save money?
Definitely! Using cash is a great way to save money. If you only withdraw a set amount of money for the week to be your ‘spending money’, you’re more likely to be conscious of how much you’re actually spending. This might mean you only buy one drink while you’re at dinner rather than two, or opt for making a coffee at home instead of buying one.
Using cash to save money: 5 tips
If you’re struggling to stick to a budget, you might want to give a cash-only system a go. Using cash to save money can be a little weird at first, so we’ve outlined a few tips and steps to get you started.
1. Choose what you’ll change to ‘cash only’
The first step in using cash to save money is to pick when and where you’ll use it. Odds are you’ll probably have to use your debit cards or online banking to pay for your bills or to make mortgage or online loan repayments. So this leaves you with using cash to pay for things like going out, groceries, clothes etc.
It’s totally up to you how you create your cash-only system, but we recommend using it in an area that you typically overspend or are most guilty of making impulse purchases.
2. Stick to your limits
If you’ve burnt through all of your cash, it’ll probably be very tempting to just start paying for things with your credit or debit card. But just remember, we’re using cash to save money. So try your best to stick to your limits, otherwise you’re just doing your future self a disservice.
3. Choose a day to take out the money
Be sure to set aside a day that you’ll go to an ATM to get the money out. You might want to do this on a Monday or on payday.
4. Adjust your limits
Once you’ve tried using cash to save money for a few weeks or even months, take another look at your budget and how you’re tracking. If you’re avoiding impulse purchases but still running out of cash each week, you might have underestimated how much money you need. Take a look through old receipts or even start tracking exactly where your money is going so you can adjust your budget accordingly.
5. Use your left-over cash
If you’ve had a good week and have a bit of cash left-over, don’t just go ahead and spend it – put it to good use. You could make an extra repayment on a cash loan or bump up your savings.
Need help structuring your finances?
If you find yourself having spent your way into financial uncertainty, there’s no need to panic. Swoosh has the solutions for you. We offer simple access to fixed-term, secured loans with scheduled repayments that can be easily integrated into your weekly budget. So we can get you back on track to saving for a more secure future.
