10 Benefits of a Cash-Only Spending Plan When Paying Off Debt
Consider these ten benefits of paying with cash instead using plastic whenever possible when you’re trying to pay off or stay out of debt.
While using cash only may seem drastic, here are ten good benefits of a cash-only spending plan, especially if you’re in debt:
1. You are forced to learn money management skills.
Using credit doesn’t teach you to manage your money, it teaches you how to juggle your bills.
With cash only, you need to plan in advance for each day/week/month. If you buy a new coat and eat out four times this week, will you still be able to afford gas to get you to work next week?
2. You will learn the value of a dollar.
With credit or debit cards, a quick swipe will get you a $6 latte and you won’t even notice the money you have just parted with.
With only $100 on hand for this week and a need for gas, groceries and allowances, every dollar counts.
Sign Up for Savings
Subscribe to get money-saving content by email that can help you stretch your dollars further.
Twice each week, you'll receive articles and tips that can help you free up and keep more of your hard-earned money, even on the tightest of budgets.
We respect your privacy. Unsubscribe at any time.
3. You will get creative.
If your daughter’s birthday is coming up and you have limited cash, there is no end to the creative steps you will take to give her a wonderful birthday.
Excess “stuff” around the house? Sell it for extra cash. Have $100 for this week’s groceries? Go meatless for a few meals, end up spending $80 instead of $100, and then put the $20 you just saved towards a special present. Leftover wrapping paper? It can become confetti, streamers and decorations for the party.
Creativity can be more valuable than money.
4. The difference between “needs” and “wants” will become apparent pretty quickly.
How many times have you “needed” to eat lunch out? Do you find that you “need” high-end cosmetics whenever you pass the department store counter? Is every clothing purchase a “need”?
With a limited amount of cash, your needs will line up quite nicely. You need gas. You need basic foodstuffs. You may need eyeliner since yours resembles a stubby pencil but do you need the $30 liner when you can buy basically the same product at Walmart for $5?
5. You will stop the vicious cycle of credit card debt.
First, you will have stopped using your credit cards and, therefore, stopped generating more credit card debt.
Second, while having a limited amount of cash will lead to some (possibly) drastic spending cuts, at least each payment made to your creditors will pay down your debt instead of making room for more debt to pile up.
Get Help Paying Off Credit Card Debt
Use these guidelines to choose the best plan to pay off your credit card balances.
6. You will become a consummate shopper.
Shopping with a limited amount of cash forces you to stretch every penny. You will learn to compare prices, cut coupons, maybe make a price book, look for alternatives, buy on sale, search out discounts and basically get the most possible out of each dollar spent.
7. You will learn to determine what you need and not fall for the contrived “needs” generated by advertisers.
Billions of dollars are spent each year to separate you from your hard-earned money. By making you feel deserving, inferior, or just not quite as good as you could be, advertisers convince you to spend your hard-earned money on quite a bit of expensive, frivolous stuff.
8. You will be giving your friends, family and especially your children a reality check.
Living an extravagant life based on credit card spending is not reality. Instead, it’s a fairy tale.
Unfortunately, there is no White Knight to save you from impending financial disaster. Living a cash-only lifestyle is reality.
9. You will actually save money.
Aside from a few perks that come with using a credit card, unless you pay your balance in full each month, you are losing money to interest charges and possibly over-limit or late fees.
10. You will be in charge.
Using credit puts you at the mercy of creditors and lenders. They set the interest rate and payment rate and send reports to the credit bureaus. Paying with cash allows you to be in charge of your finances.
Switching to a “cash only” spending plan is hard, and the first few months will probably be the worst. However, with a positive attitude and a large dose of creativity, you will wonder why you ever fell into the credit card trap.
Reviewed March 2024
Sign Up for Savings
Subscribe to get money-saving content by email that can help you stretch your dollars further.
Twice each week, you'll receive articles and tips that can help you free up and keep more of your hard-earned money, even on the tightest of budgets.
We respect your privacy. Unsubscribe at any time.
Popular Articles
- 7 Habits of Highly Frugal People
- 5 Simple Budget Cuts That Can Save $200 a Month
- How to Track Down Unclaimed Funds Owed You
- 32 Ways to Save Money on Your Utility Bills
- Do You Need Credit Life Insurance When Buying a New Car?
- How to Maximize Profits When Selling Online
- Staying Motivated to Continue Digging Yourself Out of Debt
On After50Finances.com
- 9 Things You Need to Do Before You Retire
- You Didn’t Save Enough for Retirement and You’re 55+
- When Empty Nesters Reorganize and Declutter Their Home
- Reinventing Your Career in Your 50s or 60s
- What Mature Homeowners Should Know about Reverse Mortgages
- 2 Reasons to Collect Social Security Benefits As Soon As Possible