Should Going Cash-Free Be Part of your Debt Plans?Dec 07, 2016
Job losses, the rising costs of basic necessities like food, hydro and living accommodations and increasingly high consumer debt levels have many in Alberta keeping an eye on their pocketbooks and focusing on controlling their debt and their debt plans. Although there are many great ways to manage debt effectively, one of the most straightforward methods to track your expenses and control your debt is by adopting a cash-only policy.
How does sticking to cash make controlling your spending and debt easier? Simple. First of all, cash provides a concrete and tangible sense of spending money that seems to be missing when using digital payment technologies like Apple Pay and tap-enabled credit cards. This sense of actually spending money can translate into making more mindful and purposeful purchases and can guard against impulse buys. Using cash only also means that your spending is limited. For example, you withdraw a certain dollar amount for clothing purchases each month and when that money is gone, no more purchases can be made until next month. This is not the case when using your credit card.
A cash-only approach is also helpful when it comes to budgeting and financial planning. Using only cash means that you will need to plan how much money you will withdraw from your bank account each week or each month. This type of planning will also likely encourage you to use and follow a budget, one of the simplest and most effective tools for managing your spending, finances and controlling the amount of debt you carry.
High-tech ways to manage your finances and control your debt
Going cash-only doesn’t necessarily mean that you can’t go high-tech. In fact, there are many online apps and tools that can help you effectively manage your money and control your debt. An online debt calculator, for example, can help you gain a clear picture of the various debts that you carry and how long it will take to repay these debts that you owe, as well as the amount of money it will cost you to repay each debt.
Online budgeting tools are also helpful when it comes to managing your finances and your debt. Mint and Wally are great tools that can help you monitor and track your spending, as well as your financial goals and priorities.
Other sources of debt help
In addition to online tools, there are also other resources available to help you if you feel overwhelmed by the amount of consumer debt that you currently carry. Debt relief professionals, such as a Licensed Insolvency Trustee (LIT), can provide you with information about various debt relief options that are available and can provide you with the guidance needed to incorporate the right strategy into a debt relief plan that works for you.
Cash-only or cash-free, there are simple ways to manage your money and avoid the disconnect that can occur when using digital payment technologies. To stay on top of your debt plans, remember to spend mindfully, keep track of your spending and seek help if necessary.
Is adopting a cash-only approach to spending part of your debt plans? Join the conversation and share your thoughts with BDO Medicine Hat using the hashtag #BDODebtRelief.