number two: operate on a cash only basis

This is a recent addition to my bag of money saving tricks. In the fall, I switched from a bank account with a $12 monthly fee to a student account that had no monthly fee. The catch being that you could only make 25 transactions out of your account per month, and every transaction over that had a stiff fee attached. The first month my fees came to $19. Grrrr! But now I’m much more careful. I pay my bills (6 transactions) and then take out $100 at a time and use cash for purchases.

The $100 does not stay in my wallet. I dole out smaller amounts based on what I think I’ll need for the next few days, such as a bus pass or groceries. At first I thought this would suck (not sure why) and I felt like this cash only system was being imposed on me by the stupid bank (again, not sure why) but it has turned out to be vastly beneficial for three reasons:

  1. I don’t pay any monthly banking fees because it limits my total number of transactions (which was the point in the first place, so yay, it’s working!);
  2. Debit money is fake and cash money is real, at least mentally. With cash, I can physically see my little pile of twenties getting smaller and this truly does make me think more about what I’m spending my money on; and
  3. My account automatically comes with $500 overdraft which I can’t get rid of. It is unbelievably easy to dip into it when using debit. With cash, I monitor my account more closely and make decisions rather than inserting my chip willy-nilly and realizing after the fact that I’m in debt.

Absolutely plan to stick with this system once I’m employed and on Easier Street again.

An added bonus? I don’t have to worry as much about stuff like this.

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One thought on “number two: operate on a cash only basis

  1. this is great stuff c 🙂 thanks so much for sharing. i am budget-minded challenged. i need to be much better. you are inspiring as usual.

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