Need Financial Help? Pay With Cash To Control Your DebtDec 06, 2016
With the rise in popularity of virtual reality games like Pokémon Go, it’s clear that the world is wholeheartedly embracing all things digital. Newer digital payment technologies like Apple Pay, RFID bracelets and tap-enabled credit cards mean that retail transactions and personal finance are also keeping pace, with many Canadians adopting these newer payment options – especially the millennial generation. One-third of millennials have said they intend to use their smartphones for making purchases more often this year. It may come at a high cost, however, particularly as these payment methods can potentially lead to financial challenges, like difficulties tracking your spending or keeping up with credit card payments. As such, despite the relative ease of these new payment technologies, adopting a cash is king approach could help maintain your financial stability and keep your debt at a manageable level. Here’s why:
1.) You’ll likely follow a budget
Using only cash for your various expenses means that you will need to plan ahead in order to ensure you have enough to cover the bill. A budget is a great financial tool that will help you with the process. There are also a quite few digital options that can help you create your own personal budget, including apps like Mint.com.
2.) Your spending is limited
The idea behind a cash-only policy is that you withdraw specific amounts each month for each expense, like groceries, entertainment, and clothing. Once the cash is spent, there are no more available funds for that month (which isn’t the case when it comes to digital payment methods). Limiting your funds by limiting yourself to cash can help you stay disciplined and financially on track when it comes to your spending and your budget.
3.) Your spending is mindful
With tap-enabled credit cards and other digital payment methods, it can be quite easy to spend without even thinking about it. In fact, it can almost seem like you are not even spending money at all, which can quickly become problematic when it comes to your finances and debt. Using cash is a more tangible experience. You will likely be more mindful of when and where you are spending your hard-earned dollars.
In addition to adopting a cash-only policy in order to control debt, it’s also important to seek financial help when you feel that your debt has become unmanageable. Take stock of your own debt. Is it causing you financial strain? Are you missing bill payments? Are you unable to repay certain debts? An online debt repayment calculator can help you quickly determine where you stand and whether it’s time to take action.
If you do feel that your debt has become unmanageable, look for ways to get it under control quickly, easily and effectively. Debt consolidation, for example, allows you to combine multiple high interest debts (like credit card debt) into one loan with a lower interest rate attached. A credit counsellor or Licensed Insolvency Trustee (LIT) can help you determine whether this is the right financial approach for you to take and can also explain all other alternative solutions that might help make your debt more manageable.
Do you use payment options like Apple Pay? Do you find it difficult to track your spending? Join the conversation and share your thoughts with BDO Barrie using the hashtag #BDODebtRelief