Cash
January 9, 2009
One of Maggie’s comments showed how useful credit card statements can be to help us see where our money is going. This kind of analysis is a valuable first step in identifying areas where we need to be more careful or where it would be easy to reduce excessive spending without too much pain.
However, this does not always help us to stop spending the money in the first place. I would like to propose another way: good old-fashioned hard cash. You will recall I have decided to give myself EUR50.00 a month “pocket money”. I’ve put this in a separate zippered compartment in my bag. Every time I spend something on myself (including internet or other credit card purchases) I take it out of that compartment. When it’s all gone I’ll have to wait until the 1st of the next month to get more. It’s very tangible and the visual impact of the dwindling stash is sobering.
In a way I’ve been doing the same thing with my credit card spending. I have a standing order with my bank to pay off both my cards in full from my savings account (at the same bank) each month. I check my balance from time to time and if it’s low I stop using my cards. Full stop. I’ve never paid a cent of interest on my cards, in fact they are totally free (no annual charges) and were offered to me by my bank as a promotion (they bear the emblems of football clubs).
The principle of separate compartments for cash could also be extended to groceries and other household expenses.
Sunny
