Each day we spend tens, hundreds, even thousands of dollars of expenses on our credit or debit cards, and our balances climb higher and higher. We rarely realize what’s going on until we take a look at our statements. In this article, I’m going to explain cash diets and how they can be useful to you if you have a tough time budgeting! But what is a cash diet?
What is a cash diet?
Cash diets are an extremely useful tool to save money. However, much like a real diet a cash diet can take some very strong self-control. The basic concept for a cash diet involves the following
- Find out what your expenses are for a month
- Withdraw only enough cash for the month
- Do not spend any more cash that month than your cash diet allows for
It’s that simple!
One tip to make a cash diet easier is divide all of your expenses into categories, then create a specific envelope, plastic bag, etc., devoted to each category. By doing this, it makes it easier to keep track of how much money you have to spend on certain things such as food, entertainment, gas, or other expenses!
Why is a cash diet so useful?
If you put yourself on a cash diet, you’re more than likely to only spend the amount that you budgeted to spend in a month. There is very little risk that you exceed your monthly expenses, making it easier to save!
Pros of a cash diet
- Little chance of overspending
- Easy way to keep track of expenses
- Easier to detect credit fraud
Cons of a cash diet
- You have to make sacrifices in your budget
- Carrying around cash can be dangerous
- A lot of discipline is required
Is a cash diet right for you?
That depends… A cash diet could be the wrong choice for someone who has thousands of dollars of expenses per month. However, if you’re a college student, or your expenses are minimal it’s a great way to control your budget!