Like HowStuffWorks on Facebook!

10 Tips for a Debt-free Life


3
Use Cash
Pay cash whenever possible, even if that means you have to forgo a purchase until you have enough money to pay for it.
Pay cash whenever possible, even if that means you have to forgo a purchase until you have enough money to pay for it.

Cash is, in a sense, real-time. Paying with cash happens on the spot, with no further steps or future charges. Cash is also real time in the sense that when it's gone, it is gone. Withdrawing a set amount gives you something to work with when it comes to making buying decisions, and cash limiting each week or each month can keep your spending down.

Debit cards have replaced cash for many people worldwide. A benefit of debit cards is the convenience of using them as cash without having to make a bank or ATM withdrawal or having to write a check. Some downsides to using debit cards come in the form of self-control and theft control. Using cash allows for budgeting a fixed amount in real currency, while buying with a debit card pulls monies directly out of your bank account up to the limit of your balance. Debit cards also have fewer protections, and when stolen, they can be used immediately to make purchases and get cash back.


More to Explore