Do you think paying cash and budgeting instead of paying card will save me money?

jadex91

I pay for everything on my debit card and am always left with no money and have nothing to show for it, most goes on bills etc, do you think if I withdraw cash and limit myself to so much a week and leave my card at home that this idea would work? Need to save money to pay off bits, thanks

3wisemonks

I think its worth a try. Works for me cash seems to feel more 'real'. Also if you pop to the shops for a loaf with a pound you'll only buy the loaf go with your debit card and you're pretty much guaranteed to walk out having spent £5+

MrWillyWonka

I think most people will agree that it depends on preference, across this board I have seen some people budget better with cash, some with card. I budget better with card and will often spend spare change.

As 3wisemonks says, it's worth a try and I'm sure you'll soon find out which works best for you.

The_fog_has_lifted

personally it works for me to budget with cash- i personally use the envelope system. like this https://www.youtube.com/watch?v=-H2RQRYEy5U

tealady

I find cash works for me. I take a set amount out of the bank each week for house keeping and have to live within that. It means that I watch what I put in my trolley and try to keep a couple of pounds back for small emergencies (like running out of milk). I also find meal planning helps.

joeblags

The_fog_has_lifted wrote: »

personally it works for me to budget with cash- i personally use the envelope system. like this

Pretty wired that somebody goes to all that trouble ? open savings account and transfer money across if you want to save it and not spend it?

bambos

joeblags wrote: »

Pretty wired that somebody goes to all that trouble ? open savings account and transfer money across if you want to save it and not spend it?

It's not about saving though it's about daily spending habits.

When you're buying something in a store then it's so easy to 'pick up' those extra offers and bogof when using a debit card. If you have cash then psychologically you will think about how much it costs and how it impacts your budget.

We worked the envelope system for a long time and still do now when we have a tight month. I find that if you can actually see how little is left you won't impulse buy.

Money_Muppet

Have you tried YNAB (You Need A Budget)?

Works in a similar way to an envelope system, and allows you to track all your card and cash spending.

timbstoke

It depends on your mindset. I used to always work in cash, until I started my new budget this year. The problem for me was it created a disconnect between how much money I had in total, and how much disposable cash was in my wallet. I'd withdraw more, taking the attitude "Well it doesn't matter whether or not I have money, it won't change the fact that I need money" so I'd withdraw without even checking my balance. Head in the sand time.

This year I've gone the other way. I spend everything on card, so I know where it's going, and make a point of reconciling my accounts every few days so I don't lose track of what any given transaction was spent on. So far this month, I've spent about £600 less than I would have in an equivalent month working with cash only.

charmed1318

I think it depends on the person, so try both.
I used to think, paying on my card would allow me to budget better, by seeing what was going out of my account using online banking etc, but I found that because the cash was there somehow it would get spent.
This month I has started taking out the money on a set day each week, using lists and menu plans etc to work out what I need and although I may sneak in odd bar of choc, I am spending a lot less then I used to.
I have also started putting all my spends on a spreadsheet to see in Black and white where it is, but many people use YNAB and others.
I think part of it is the psychological effect that if I get the loaf of bread, for example, I can pay with the £1 I have, if I add I'll have to break into the £5 note (which will get used just not now).
If that makes sense.

Good luck with whichever you choose.