Thursday, 1 February 2018

A Cash-Only Month

One tip I have read about over and over that helps save money is to ‘pay by cash not card’.

I live in a country where the use of debit rather than credit cards is still widespread and so it must seem that this tip might not exactly apply to Malta. After all, credit allowance in Malta is very limited as I learnt just by trying to get another credit card from a different bank, whereupon I was asked for proof that I lowered my limit on another bank’s card just to be allowed to apply to get a credit equivalent only to that amount!
Truly, I don’t even use my credit card for its intended purpose much, preferring to own one solely for ease of online buying. However, there are always pitfalls to buying by card, be it debit or credit, should you be trying to save rather than spend.

To start with, a credit card WILL let you use more money than you have, whether you’d like it or not. And with that in mind, it is easy to buy something ‘this month’ rather than the next, knowing you can pay it later,  even at no interest if you are diligent with paying on time. Which leaves only the problem of having already spent some of NEXT month’s pay, right?!

When it comes to using a debit card, there is less danger of overspending as you are required to actually have money in the account to make a transaction. Still, this method of payment does not hold us accountable like good old cash does, simply because signing on the dotted line else putting in that password is much easier than counting out the money.

I have to admit that when the cashier asks me for the money, I barely register the amount he is asking for when I am paying by card. When I do pay in cash, however, I need to count out the money and even check do I have enough in my purse! Using a debit card will easily allow me access to money put aside for something other than the purchase I am making, as the purpose of the bank account is actually to keep our money safe and put aside.

I am not one to carry much cash and I would not prefer to withdraw more instead of using my debit card at EPOS for bigger purchases. Meanwhile it is not always possible to use a debit instead of a credit card online either.

Even with these limits in mind, I decided to give this ‘buy cash only’ idea a try, making allowances for cards in two instances only:

I will still pay by card at the supermarket when the bill is big, ensuring to reduce my groceries budget from my spreadsheet workings as soon as I am home on the same day. This will ensure that I do not overspend anyway in the one given area, for the month.

My second concession will be to allow myself the use of a credit card should I finally find to buy online a copy (new or second-hand) of the film tie-in edition of the book Any Human Heart. This because I have been on the lookout for it for long months now and it is very difficult to come by.

With these two exceptions in mind, I hope to try this experiment for a whole month, starting today. I am skeptical as to the extent of a difference it will make and will keep notes too, giving my feedback on here once the month is over. So keep tuned, till next time.

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