Lessons In Finance: When Spending Your Money — Cash is King

In our last lesson we showed you how to easily put aside a portion of your paycheque into a high interest savings account. While you enjoy seeing that money grow, we can now focus on making your walking around cash last.

Tracking your spending indicated how much money you need to get by on between pay periods. Whatever that amount is, go to your bank’s ATM and take it out in cash. I told you to use a debit card before — so that you could track where your money was going over a month’s time. We’ve done that — so now we can start using cash to make our purchases.

There are many reasons to do this — but a key one is that you will spend less money using cash to buy things instead of debit. Why? You will control your own spending because you will always know how much money you have left.

If your bank has provided your account with overdraft protection, you have the option of going into debt if your account balance goes below zero. You pay fees and interest every time you use this dangerous convenience, so my advice would be to avoid overdraft protection altogether and pay with cash. You will end up spending less. Here’s why.

Finish the lesson at Financial Fridays at Public #onted