Plastic Money Is Real Money. Make It Tangible

How does a person develop good spending habits with money? Have a budget. Have a plan in place that you revisit and update often. Monitoring for progress and for blind spots.Deal with real money.

We also live in a world where every app, every commercial, every billboard, every grocery store isle has been stacked and designed to present temptations to us.

Temptations To Spend

Our email is often filled with savings opportunities from favorite stores. And, we know our social media is very good at targeting specific ads to whatever items we have recently looked at. And, items we have spoken about. Not to mention the dreams our loyalty programs frequently offer to us.

Can you just imagine sitting on a tropical beach listening to the waves and forgetting about all the garbage we have been stuck with this year.

Not to mention the automation that makes charging that credit card or electronic payment seamless. It is true, it has never been easier to spend!

Real Money Habits

One habit that has helped me a great deal with eliminating reliance on debt was planning what I carried in my wallet.

Instead of only carrying plastic I began carrying a ‘float’ of cash, this float was one of each of the denominations so a $100, $50, $20, $10, $5.

Money and Travel

When I travel, I switch over the local currency before arriving at my destination.

Carry common denomination bills. Some countries have high denomination bills. For example, in Europe you will see €200 and €500 bills. On more than one occasion in my travels local businesses were not able to deal with the large denomination bills. In fact, some businesses even told me they had not seen a €500 bill before as they examined what I had handed to them.

Even when I had a plan to avoid use of credit, that was my backup when the cash did not work. When I travel on business and have an opportunity to mix some personal time in the trip. For this reason, I plan separately for both work finances and personal finances.

There Is Something Different About Holding Cash

I had a rule that I was free to spend this cash at will. I held cash in my wallet and replenished my float after all other budget items were taken care of. Interestingly, I felt a real difference in my behavior when I was shopping and deciding if I wanted this shiny object enough to hand over my cash. In fact, it is more difficult to hand over cash than to hand over a credit card.

The cash is tangible, I could see it and feel it.

I could tell how much was there just by touching it. And it meant something to remove it from my wallet and let go of it across the counter. Holding cash helped me control impulse spending. And, for me was an entirely different sensory experience than swiping or tapping a card.

While Money Can’t Buy Happiness, It Certainly Lets You Choose Your Own Form of Misery.

Groucho Marx

Times are changing. We are seeing a decline in reliance on cash and a real shift to electronic traceable banking.

The tactile connections to money are changing and I needed to shift my habits to align with this.

I have my budget; I have my plan in place that I revisit and keep current. I deal less with cash and have adopted some helpful habits.

Real Money Habits I Recommend To You

• Have dedicated bank accounts for savings, personal transactions and business use. Finances can get confusing and create problems when business transactions are mixed with personal finance. Therefore, separate them.
• Use a Personal Finance & Money tracking app. Add your accounts, budget, goals and bills. My preferred app allows me to see all my accounts in one place. Additionally, I can set alerts for bill reminders and budget limits. And, I can also see my credit report.
• Use notifications to monitor credit card use. I allow notifications for charges on my credit cards. This allows me to monitor my own credit for fraud. In fact, I ensure that vendors are charging what I intended to pay when I make purchases and I catch unexpected transactions immediately. For example, last year I was working at my desk and watched an $1100 charge notification pop up on my phone from an airline I had never flown with. And, I immediately contacted my credit card company and reported the fraudulent charge within minutes of it occurring. The charge was reversed, and the credit card company took action to investigate the fraud. An unexpected charge like this could have severe and negative impact on an individual’s personal finances.
• When vacationing track receipts daily. I find it easy when I am on a trip designed to relax and disconnect from work to also lose sight of personal finances. Because of this, once you get to a vacation destination and have switched over to credit card use your meals, drinks and shopping can add up quickly. To control this I set a vacation budget before I depart. Additionally, I keep all receipts during the trip and tally them each day to ensure I am aware of what I have spent. Further, this also acts as a monitor for duty limits on my return home.

Always Know Where Your Money Is

You should always know where your money is. If you are travelling on business know your limits. Separate work and personal expenses and retain all your receipts. Know your conversion rates and deal with local currency when abroad. I use and recommend XE.com currency converter. Additionally, they also have an app.

Keep these things in mind when reading email and browsing social media:

These deals will come again.

There wouldn’t be loyalty programs if it didn’t lead to increased spending and profit for the business.

Make sure whatever purchase you make is part of your plan.

I am not a gambler, if you are, remember:

There wouldn’t be government involvement in gambling if the odds were against the house.

Take steps to make your financial transactions feel tangible.

Last note:

One day we will travel again.

Additionally, all of our posts in the Personal Finance Series can be found here.

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