Start Paying Cash

I have been reading the book, "Finish Rich Workbook" by David Bach. It talks about different ways to help you keep your money. One of the things it says to do is to start paying cash for things.

Here is an excerpt from the book.

"Now that you've tracked a typical week's expenses, are you ready to start chianging yur ways? The easiest thing you can do to reduce your spending automatically is to commit to paying for everything with cash.

When you buy things with credit cards or personal checks, you don't feel the significance of your spending. Your mind plays tricks on you. You haven't actually handed over the green stuff, so you don't quite believe that you're spending money. I dare you to stick $500 in cash in your wallet and try to spend it frivolously on impluse purchases. You'll have a hard time doing it. That's because cash makes you think about exactly how much you are spending and for what. I can't tell you how many of my FinshRich readers have told me that when they went to a cash only system, their spending dropped by 20 percent in a single month!

To get you started, review your checkbook register (if you actually record stuff--a lot of people don't) and your credit card statements for the last month. Make a list on the following page of the items that you bought. Figure out which of those items it would have been smarter to pay for with cash. Put a check mark next to those items."

This seems like a drastic measure. But having done it, I can say that it does help you think before you spend. For more information on budgeting Click Here!