At Super-Advice we are about all things financial, but more importantly, helping people understand so they can get ahead financially.
In today’s blog post we share with you a trick that is an absolute winner when it comes to spending less money.
The ultimate goal
Ultimately we want to spend less so that we can save more and ultimately we wanna save more so that we can invest more.
Once you’ve got that stack of cash behind you, money worries tend to just strip away.
Cards changed the dynamic of a transaction
When credit cards and EFTPOS cards came out it changed the dynamic of a transaction.
Previously if you wanted to buy something that was worth, say $20, you turn up to a shopkeeper with your 20 bucks and you hand it over and then you get back your item. Thank you very much.
There has been an exchange, you’ve had to give something away in order to obtain your item.
When it comes to buying something with a card, say an item worth $20, I just have to present the card and pay, then I can take my item. Now we have our item, but we’ve given nothing away as we also keep the card.
So the way the brain registers a transaction now is totally different. It doesn’t feel like you’ve had to trade anything to pick up your item.
When you change to using cash – you will notice the actual trade.
How using cash changes your spending, Jeremy’s story
I was driving home a few months ago. I remember this specifically and I had been operating with cash for a period of time. I’d been in town for a while and it was midafternoon and I was feeling a little bit hungry and thinking maybe I could do with a nice can of cold Coke and a snack.
I was gonna stop at the dairy. I pulled over and stopped at the dairy on the way home. I reached for my wallet because for those types of purchases, I use cash and I only had the fifties in my wallet. I didn’t want to break it. I didn’t want to break my $50 note so that I could get a drink and something to eat when I knew I could just shoot home, I’d be there in 15 minutes and I could pour myself a drink from the fridge and make a sandwich, perhaps.
I found when you actually have the physical cash in your wallet, you actually watch it begin to shrink as you spend it, you will stop yourself making what I would call frivolous purchases or frittering your money away.
Visible cash stops you from spending
Visibility is an absolute key to saving. When you are using your card, there’s no visibility. With cash, you can see straight away what you have and what you don’t. With a card, you can’t see anything unless you check an app but that’s not as instant as using cash.
Budget your carry cash
When you are doing your budget and you’re lining up all of your bills, you put an entry in your expenses as your carry cash. And that’s all you get to use. Once it’s run out for the week, it’s gone, so you control your spending, and all your bills get taken care of with direct debits or automatic payments.
If you implement carry cash, you will find you’ll have way more money.
That’s a wrap
So what do you think? Will you use our carry cash trick to save help money?
If you need any financial help or advice please get in touch with us at Super-Advice.