As I was reading through my morning articles today, I stumbled upon one that referenced going on a “money diet.” It naturally caught my eye as I’ve been living in “planning for the future” mode lately.
As a millennial, research has proven more and more of us are living by plastic. It has also been proven that we don’t fully think through or appreciate the expense when not having to count out and hand over the cash. Think about how much you use your card. Having cash on hand is naturally less appealing and more work when you’re making constant runs to the ATM.
Cash is King
Have you heard this phrase before? It’s important while planning for your future to have a reserve of cash. This can become very difficult and a tumultuous cycle if you get caught up in paying by plastic regularly. Using credit cards are ok as long as you make sure you’re paying off your balance each month.
The Lifestyle Creep
So you just got a raise at work – congrats! Now you’ve decided you can increase your expenses as a result of that raise – WRONG! Many people, past me included, feel that making more money means you can increase your expenses. While it’s ok to celebrate and splurge a little, it’s a bad idea to use that raise (every time) as an excuse to spend more.
The lifestyle creep is a very easy thing to fall into. Have you heard of the phrase “keeping up with the Jones’?” It’s the same concept. If you want to save for the future you have to live within your means and save a percentage out of every check.
The Cash Diet Challenge
So – let’s play a little game called the cash diet challenge. For 30 days, challenge yourself to use cash to pay for everything outside of your normal monthly bills. Going out to dinner? Want to grab drinks after work? Pay cash. Think about everything above and beyond your required bills and pay cash for it.
While doing this, you’ll be forced to go to the ATM to withdraw more and have to consciously count out cash and hand it over for every purchase. I bet it will make you think twice about grabbing that extra coffee or when you’re at the mall shopping.
Cash within limits
Paying for purchases with cash doesn’t mean you have endless withdraw limits. You’ll need to look at your budget (or create one if you don’t have one already – yikes!), and plan on a withdrawal amount based on that number. And stick to it!
Part of this requires you to track every purchase you make. I know, sounds terrible, but you’ll need to as part of the challenge. Visually seeing everything you’re spending will help you notice and break habits. When you realize you’re spending $300 a month on coffee alone, it might make you think twice. This doesn’t mean quit buying coffee, it just means it’ll help you realize where mindless spending comes into play.
Have you gone on a cash diet or completed a money challenge? I’m super curious to hear your results! If not, take the challenge and let me know what you discover! Share your thoughts with me in the comments or on Instagram, Pinterest, Facebook or Twitter! Follow Boss Gal while you’re at it. Don’t forget to subscribe to receive everything Boss Gal right to your email!