While dieting to lose weight is no easy task, a spending diet is even more difficult. Opportunities to spend money besiege us. Another notebook, a purse, more shoes, a book, storage baskets, tools, gadgets, I could fill a shopping cart in a matter of minutes, but I’m going on a spending diet and I hope you’ll join me.
Think of the satisfaction of seeing more money in your checking account or paying off debt or saving for something special instead of just collecting more stuff.
I know for me, the use of plastic creates problems. It’s so easy to swipe that debit or credit card without even thinking. When we first married, the ATM card created problems. (Basically, a debit card, but it could only be used at the bank to withdraw cash.) Two people stopping at the ATM on any given day and withdrawing money from a single bank account was a recipe for disaster. In less than a year, the ATM card was destroyed to protect our credit.
I recently saw a report that estimates people using debit or credit cards spend 12%-18% more than those using cash, and I’m certain that describes my behavior. For years, we lived a cash lifestyle. You may remember my weekly trips to the bank with cash divided in envelopes as a budgeting tool. Credit cards served as a way to pay for big ticket items or for emergencies, not for day to day purchases.
I think we got away from the cash plan when purchasing gas required $100 or more per fill up. It also became much more convenient swiping a card at the pump than walking inside to pay, but I think I’ve come up with a plan to deal with this problem. I’m using a credit card to purchase gas, however, when I return home, I immediately transfer money to the credit card account eliminating the possibility of increasing debt with the purchase of gas.
I know many financial experts suggest leaving credit cards at home to avoid the spending temptation, but that doesn’t seem wise. What if you have a flat tire or an emergency? That’s the advantage of the credit card…just think before you swipe! Yes, I’m re-instituting the cash lifestyle but not by being unprepared for the unexpected.
In an effort to reduce spending, I plan to do the following:
- Use cash. Withdraw a budgeted amount every week. When the cash is gone, make do until the next regularly scheduled withdrawal.
- Stop shopping. Don’t go in the store. Avoid temptation.
- Make a list. Don’t go to the grocery or any store without a list to eliminate unnecessary purchases.
- Unsubscribe. Those weekly, and sometimes even daily, emails from Sierra Trading Post and the Container Store and Groupon encourage me to spend.
- Deposit all catalogs in the recycle bin. Don’t even open. Better yet, call to get off the mailing list and then recycle.
- Record all purchases. On the envelopes with the cash, in a journal, or on a personal finance program like Mint, recording raises awareness.
I know I’ll feel better with a little more cash in my pocket. Won’t you join me by going on a spending diet?