In Savings Habit #2, we talked about how Not To Pay More Income Tax Than You Owe Now, we are going to do something more interesting and definitely A LOT  more fun!   By the way, it’s okay to have fun with this stuff.  There is no rule that says you have to struggle through these steps (as if they were chores) Make them fun!

Savings Habit 3. Use Cash for Discretionary Purchases - I’ve often heard Dave Ramsey proclaim (And, I agree with him) that paying cash for things hurts more than when we use plastic (debit or credit cards).  It seems that we just aren’t as sensible when we are using our credit or debit cards; this should be evident given the economic climate.   Yet, we are much more reluctant to spend when we have to give someone our “hard earned” cash.  This is because we assign a positive emotion to cash and it’s hard to give it up.  We’re attached to it! Want to put this to the test?  I do and I am.

Action Step: Beginning next Sunday, go to your local ATM and withdraw the amount of cash you would typically spend on discretionary items for the week (food, gas, coffee, snacks, lunch, etc)  The rule is that you can’t use your credit or debit card the whole week.   See how you fare.  Do you feel an emotional pull when you have to pay with things for cash?  Do you give more thought to what you are buying?  Do you find yourself putting things back on the shelf?  These are some of the results many people have when applying this technique.

If you’re like most people, you will find that you spend a lot less than if you had used a credit or debit card.  Do you think this will work for you?  Please explain why or why not?

In Savings Habit 4 we will look at How To Avoid All Unnecessary and Late Fees for Everything once and for all.  I will teach you strategies on how to do this.

Related posts:

1. 4 Savings Habits To Increase Your Savings – Savings Habit 4 – Avoid All Unnecessary and Late Fees
2. 4 Habits To Increase Your Savings – Habit 2, Don’t Withhold More Tax Than You Owe
3. 4 Savings Habits To Increase Your Savings – Savings Habit 1 Getting The Most Out Of Your Current Savings
4. Getting Out of Debt, Credit is not to be used for consumption or discretionary spending
5. High Interest Checking Accounts, How I am earning 4.04% on my checking account and you can too!