Expenses and Benefits of a Cash-Only Budget
Expenses and Benefits of a Cash-Only Budget
Many people regularly adhere to a cash-only budget. The fundamental question to raise is whether this budgeting approach is actually practical. As the economy continues to decline, individuals are becoming increasingly cautious with their spending, looking for small ways to save money. Consider these benefits when you consider a cash-only budget.
PROS
One major benefit of creating a cash budget is the increased awareness of your everyday spending habits that it engenders. Without the allure of a credit card, you may discover that you can get by with significantly lower prices on some items.
2. You'll be compelled to examine the funds slipping through your fingers with more scrutiny. You can avoid going over your budget if you allocate a certain amount to each expense. You will also start to question how much money you spend on a regular basis. For instance, you should not buy name brands when you can obtain identical products (without the brand name) for significantly less money.
Thirdly, if you stick to a cash-only budget, you won't have to worry about those pesky credit card fees and interest charges that can build up quickly. We all know that using a credit card to pay bills is convenient, but when money is tight, it's easy to go beyond. Maybe you're even considering paying late, which would result in even more fees and interest. Finally, there's the "Big Sin" of going over your monthly spending limit or cash benefit limits. You won't have to worry about this as much when you're dealing with cash instead of credit cards because, well, when the cash runs out, it's gone. Also, unlike when using a credit card, you won't be able to buy unnecessary items with this method.
4. Another thing you'll notice is that you won't use your dining out card as frequently. In an attempt to cut costs, you often peruse the less expensive menu options when you do eat out.
No. 5. You won't be able to see your savings until after the first bill payment of the month. An excellent bonus, indeed.
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