This can create real problems especially meeting up with
our daily obligations. The same applies to business accounts, working and fixed
capital expenditure.
There are many things to consider when switching to cash only
transactions. This is not a problem in many cash driven economies like Africa.
When you use your credit card to pay for items you get a
different feel from actual cash transactions. The cost of the transaction
becomes a wake-up call or reality check when notes change hands. Using cash
isn’t convenient but overspending on credit could cause serious problems.
Determine
where to Spend Cash
The first step in cash transactions is to determine the
areas to spend the notes. Choose the best category by studying your spending
habit and focusing on areas you overspend. By identifying the areas such as grocery
shopping, online transactions or utility bills you get a clearer picture of the
problem.
Change
Payment Method
Once you have identified the problem areas stop using
your checkbook or credit card. You can form the habit of carrying only cash when doing such transactions. By using cash you will notice a slight decrease in your
expenditure.
Get
Organized
A good way to keep tabs on your spending is to get
organized. You can place different cash sums in envelops marked for specific tasks.
This would help organize your spending and provide and
insight to expenditure. Once you organize the cash sums, write a
receipt for them. This way you have proper accounting at the end of each
month.
Get the
Cash
You need strict discipline to withdraw a lump sum for
specific tasks. You could withdraw money through a teller machine or visit the
bank.
Once you have the cash arrange them into the correct
denomination according to your budget. Write on each envelop the amount and
purpose.
Try
to Plan Ahead
Discipline is the key to successfully use this technique.
Always plan your shopping and payment of utility bills. Before going shopping
write a list of things you need and stick to the budget. You need to cut back
on impulse buying or un-budgeted expenditure.
Adjust
the Budget
Life is dynamic and our needs change accordingly. You can
adjust your budget after several months to meet your present reality. Make sure
you include groceries, utility bills, medical, transportation and rent. Try to
refrain from using your credit cards for shortfalls.
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