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Are you struggling to stick to a budget? One of the biggest issues people have with budgeting is learning to use a cash budgeting system. Using the right payemnt type will help you stick to your budget. | How to stick to your budget | Which payment type can help you stick to a budget | #cashbudgeting Which Payment Type Can Help You Stick To A Budget?

Let’s just start by admitting that sticking to a budget is hard.  Very few people want to limit their spending voluntarily.  However, there are certain things that you can do to help make budgeting just a little bit easier.

Most of the great budgeting tricks are psychological in nature and I totally believe that when you are trying to determine which payment type can help you stick to a budget, this is 100% true.

Which Payment Type Can Help You Stick To A Budget?

There are two payment types that will help you stick to your budget.

  1. Cash
  2. Debit Card

These method work because once you spend your money, you are done.  You don’t have anything else to spend.

When you use a credit card, there is always just a little bit more you can spend.

It is just too easy to keep spending when you know that there really isn’t a true limit.  Even if you hit your credit card limit if you have reasonable credit most credit card companies are happy to let you keep spending for a minor fee. 

Cash really is king for a reason.

When you choose to use cash the pain receptors in your brain actually work.

Think about it for a few minutes.  How often do you walk out of the grocery store and can’t remember how much you spent?

I bet when you pay with cash you remember exactly how much you spend. 

Using a credit card deadens you paid receptors and you just don’t feel the pain associated with the money that you are spending.

[clickToTweet tweet=”Using a credit card deadens you paid receptors and you just don’t feel the pain associated with the money that you are spending. #cashbudgeting” quote=”Using a credit card deadens you paid receptors and you just don’t feel the pain associated with the money that you are spending.”]

To be honest, I actually kind of think that debit cards have the same issue.  It is super easy to use them as well.

However, I’m realistic enough to realize that most people need some form of plastic.

Even if you are using a debit card, you still have the moment before purchasing something that makes you questions if you have enough cash in your account to cover the purchase.

If you are struggling to pay off debt, save money or keep a budget, the quickest way to succeed at personal financial planning is to pay as much of your discretionary spending with cash or a debit card.

When my husband and I got married and realized we had $446,000 worth of debt the first thing we did was put ourselves on a strict budget.  We asked ourselves the question – Which payment type can help you stick to a budget?  Every bit of research I did, reinforced the need to use cash.

Related Post:  How We Paid Off $293,000 in Debt in 5 Years

We bit the bullet and used a modified cash envelope system.  If we weren’t using cash we tried to mainly use our debit cards.

I’d love to say we were 100% successful with using cash, but we made our mistakes and have continued to use our credit cards occasionally.  Every time, I end up regret the decision.

If you are trying to use cash as your budgeting payment method I recommend the following:

1.  Prepare in advance
You will fail at cash-only budgeting unless you prepare your finances in advance.  You need to plan out your budget every single month and then do your absolute best to stick to it.  You can’t pay cash for items unless you know how much money you have to spend in each specific category.

If you have struggled with budgeting in the past, you may want to consider doing a percentage based budget.  It isn’t as confining as a traditional zero base budget.  It works for people new to budgeting who need a little bit more flexibility.

Check out – Budget by Percentage:  How to Create a Minimalist Budget

2.  Withdraw a set amount of cash each pay cycle
Once you’ve determined your budget, you’ll need to pull out cash each pay cycle to fund your various budget categories.  Look carefully at your spending habits and choose the areas that will have the most impact.

For example, I used my debit card for gas.  I knew if I went inside the store, I’d purchase a donut. I used cash at that grocery store.  My grocery spending is always better when I use cash since I pay more attention to what is in my cart.

Related Post:  14 Money Saving Tips to Lower Your Grocery Bill

3.  Only spend your allocated cash
I know this one seems totally obvious, but this is the hardest thing to do.  If you don’t have the cash for that amazing dress you saw, then you can’t purchase it.  It sucks, but if you want to get out of debt, then you have to stick to the payment type that will allow you to control your spending – cash!

Related Post:  Do You want to Cut Your Spending?  How to Find and Eliminate Spending Leaks In Your Budget

Which payment type can help you stick to a budget?

So why does all of this matter?  Why should you bother using cash and going to all the trouble to make and keep a budget?

Switching to a cash payment system takes a lot of work.  It is time-consuming and it takes a ton of self-control.  You won’t get instant success with your first budget – or even your second budget.  I’ve been budgeting for years and still blow my budget occasionally.

Here is the deal though, if you want to stick to your budget and get out of debt, you have to stop using your credit card as a crutch.  The only way to get out of the credit card trap is to switch to cash spending. 

When you learn to control your money, rather than have it control you, everything in your financial life will change.

You won’t be asking the question – “Which payment type can help you stick to a budget?”  You’ll be preaching cash, cash, cash and doing your best to help all of your friends get out of debt and manage their money.