Yesterday we talked about setting a budget; today I'm going to tell you that your budget should be done in cash. The reason for this is really simple, if you only have $50 cash to spend on say a new pair of shoes, then you can only spend that $50 because you don't have any more. If you use a credit card, it's very easy to justify an extra 10 or 20 dollars, and if you do that frequently, it can really add up. Yes, you will need to shop around, and wait for a sale, and probably use a coupon, but it's worth it. That is money saved and still in your pocket!
Using a cash-based budget also allows you to see your money adding up. It builds excitement. It also makes you really weigh your decision when it comes time to spend that money. If you are saving up for new curtains for your house, you are going to be much more diligent in finding the best quality and price, because you know the sacrifices and time that went into saving that money. Basically, using cash makes you a much more diligent and wise spender, which in turn saves you money. So, money-saving tip #2 -- use cash!
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