Want to gain control of your spending?

Date Posted: Feb 15, 2010

We’re all creatures of habit, but from time to time it’s good to shake
things up a bit. You can do that with your spending by going on an
all-cash diet. Many studies have shown that people who use cash spend
less than people who use plastic or automated methods of payment. Check
out http://abcnews.go.com/GMA/story?id=5642590&page=1
for the story of my cousin Marissa who took part in an ABC News
experiment. She told me paying with cash "save tons of money!"

Even if you don’t save tons, the exercise could be useful. You will gain
a new appreciation for where your money goes and just how much you’re
spending. That’s because there’s no lag between purchase and payment.
Yes, it’s a hassle to handle all that cash, but the hassle can be a good
thing. You’re more likely to monitor your spending more carefully.

With finances, as with driving, you get in trouble when you don’t pay
attention. Paying with cash helps you pay attention and trying it for a
while will give you a sense of control.