Do you swipe your debit card when you shop? Gas? Food? Costco? Amazon? etc. You get the point.
Or maybe you pay for everything on your credit card because you want "the points"? Oh yes, those illustrious points; and you plan to pay in full every month, but sometimes that doesn't happen. But that's OK, because you'll pay it in full next month. But then that doesn't happen either. And then maybe you see your credit card balance increasing and maybe you even find yourself now taking a personal consolidation loan to pay off that high interest rate credit card(s).
Have you ever received an overdraft fee in your checking account? Or found that you don't have enough in your checking account to pay your upcoming bills, so now you need to pay late on your obligations, maybe affecting your credit score and even incurring a late fee.
When you look back and calculate all that interest that you paid on your credit card(s) and maybe that personal consolidation loan, those late fees on your credit cards, overdraft fees and factor in the possible ding to your credit score (due to late paid bills), maybe the points weren't worth it after all. Maybe?
living paycheck to paycheck
not having a spending plan or understanding the difference between the balance in their checking account and forecasting cash flow and upcoming spending needs
not saving ahead for variable expenses
not consistently evaluating the previous month's expenditures and adjusting the following month's plan
Unfortunately these skills are not taught in school and many times they are not taught not in our families because our parents struggle(d) with this as well. The good news is, that these are conscious or unconscious behaviors and #mindsets that can be "unlearned".
One of the ways we can unlearn or modify these behavior is through the use of #cash. Using cash rather than a debit or credit card can also help client spend more responsibility. Having money in a tangible form can help us recognize our spending patterns and curb impulse purchases.
When you are in line at the store (fill in the blank), open your wallet and only see $_______, something emotionally and psychologically happens. As human beings, we now become more present to how much is in our wallet and what will be left after this purchase. This allows us to the more intentional in our purchase and many times, things will be removed from the basket; things we maybe really didn't need. This pause allows us to reprioritize.
Using cash can also help make it easier to track expenses outflows over time. Consumers who use cash also won’t be subject to extra fees; using cash is a strategy to get back on track with spending, and avoid cash-flow issues and overdraft expenses.
It can be hard, but nothing worthwhile in life is really easy. We learn experientially by doing, by enduring the pain - we grow. No one looses weight by reading a diet book.
I'm not saying that credit card use is bad and I don't believe that there's a "one size fits all" solution, as everyone's cash flow, values, mindset and money habits are different, but cash may be one way to help "reset" behavior.
To learn more, read "Why do people still use cash" by PolicyGenius.
#moneymindset #debt This content was developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice, and may not be used for the purpose of avoiding any federal tax penalties. Always consult legal or tax professionals for specific information regarding your individual situation/circumstances. Additionally, the opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security or service.