31-Day Money Challenge – could you use cash only for the next 2 weeks?

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For the next two weeks, cash is king – can you do it?

Why cash only?

You become immediately aware of where your money goes. Unlike a credit or even a debit card, cash is a tangible thing. If you misplace a $20 bill, for example, that’s it. You have to hold onto that piece of valuable paper and when you spend it, you feel it. Using cash forces you to make a decision: do I need this or do I just want it?

A credit card, in particular, is dangerous in this way. It can be tempting to make impulse purchases because we are able defer the pain of the bill coming. There’s a psychological disconnect. Not so with cash. Once it’s spent, it’s gone. And that hurts!

When you withdraw a set amount of cash and watch it dwindle day by day, it’s very revealing. Human beings are actually more motivated by loss than by gain, so each dollar you physically spend will impact you in a negative way, a negative way that you’ll want to avoid. In other words: you’ll become less likely to waste that money, thereby saving more of it.

Here’s your challenge:

  1. Go to the ATM at the start of each week and take out what you’re committed to spending. Obviously, this is just your spending money – for groceries, gas, entertainment, etc.not your rent and utilites. Figure out what that amount should be and take out that amount. It could be $100, it could be $175, that’s up to you to decide.

  2. Don’t spend more than you take out per week.

  3. No credit cards allowed!

Sounds pretty easy, right? (in theory, it is.)

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