Who doesn’t love to save money? No one. Managing your money well is the key to saving but how do you manage it when you have so many ways to pay? The old adage says “Stay away from plastic,” but is cash really king in the digital age? So many questions left unanswered. Luckily for you, this article answers all of those questions and more, guiding you through purchase decisions to get the most bang for your buck.
Cash is King?
People often find the benefits of cash very appealing when looked at briefly. The advantages of having a form of payment that is universally accepted are plainly obvious. Also, the ability to conserve what you spend by limiting what you physically bring is can serve as a very effective form of money management. However, you must remember that there is no safeguard against emergencies such as theft or robberies. Couple that with the reality that you will be on your own when dealing with shady merchants and defectives products.
Will that be Debit or Credit?
Where I was raised most of us were taught from a young age that paying with any form of plastic was a bad decision that would leave you drowning in debt. That misconception is only true if you allow these cards to get the better of you. When managed properly a credit card or debit card will be more beneficial to you than actual cash. There are benefits such as fraud protection, rewards such as cash back and air miles, and the ability to digitally manage your finances.
Fraud protection is the real life saver in this equation as it gives you peace of mind when unfortunate events happen. The ability to earn cash back or miles is beneficial for obvious reasons, earning points for anything by simply filling the gas tank or buying groceries is a nice change of pace from the normal reward-less way of doing things. Last thing to remember is that with a credit or debit card you can easily manage and track how you spend your hard earned money. In fact several apps exist on the Apple App store as well as the Google Play Store to help you set up a digital financial planner. Apps like Mint or Wisely help break down the difficulties that lie in financial management as well as letting you keep track of things no matter where you are.
Still, while these advantages are fairly large, studies show that paying with credit often leads to excess spending versus a debit card or cash.
A Balanced Wallet
When it comes to managing your finances the reality is that you are going to want to carry a fairly balanced wallet. Keep a credit card for payments like your phone bill, television, gasoline, or any other consistent expense. Keep cash for recreational activities where you might be tempted to overspend when using credit or debit. Keep the debit around so that you can keep a line of cash around in case of emergencies when your credit may be at its max. Everyone will have a different routine with their spending habits but passing up reward programs and easy money management by forgoing plastic is just foolish in this digital day and age.
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This article was written by Eduardo Dieguez, a 1st generation American born Cuban currently in pursuit of his AA Degree at Valencia. Eduardo is a content creator for SaveUp.com which is a personal finance website that helps to encourage people to save money.