Usually we hear “Paper or Plastic” at the grocery store, but it can also relate to how you pay for your purchases. In today’s society few people write checks anymore and many don’t use cash alot either. It seems so easy to just swipe your credit or debit card. Sometimes too easy. It is fine to use cards if you know how to manage them. One benefit of the debit card over the credit card is that you have to have the money in your account to use it. So you cannot overspend the way you would be able to with a credit card.

Also, with the debit card, as long as you don’t overdraft your account, there are no interest or finance charges as with a credit card.

Studies have shown that people are more likely to spend more when using a credit card or debit card than with cash. Cash is more tangible and you feel it more emotionally when you need to hand over a large amount. By using cash you need to plan your purchases better since you have a certain amount to spend.

One idea to stay on budget in each area is to use the “envelope system”. When you have made your budget, for each of the categories (groceries, clothes, etc) put the set amount for each in an envelope and only spend the money in each of the envelopes. If you need to go over budget in one area, you need to deduct that amount from another envelope.

Nancy Kvamme

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