When I was in high school, my parents taught me all about budgeting.
Later as an adult, I would share these lessons with friends and associates who wanted to save money and admired my financial savvy (of course, some friends just call me cheap) and I was always surprised by the results.
Sometimes, a budget helped.
Sometimes, it failed horribly.
When things went wrong, the culprit was most often out-of-pocket spending — that unconscious spending on items we think are no big deal: cups of coffee, lunches out, a tube of lip gloss, etc.
In his latest book, “The Smartest Money Book You’ll Ever Read,” (Perigee, $16), financial advice columnist Daniel Solin makes the point that in order to achieve the greatest savings you have to control both your monthly expenses and your out-of-pocket spending.
Many advisers say the key to curbing out-pocket spending is to pay cash for everything. These are probably the same ones who have taught us to cut up all of our plastic cards or freeze them in a block of ice.
But is that really the best strategy to cut spending?
First, there are costs to cash, such as trips to the ATM. It is also very time consuming to track cash spending, Solin notes.
Solin suggests using a no-transaction fee credit or debit card for all purchases and tracking whether you are on, over or under budget.
Interesting — since we’ve always been told that paying with plastic makes it easier to spend frivolously.
What do you think? Do pay more attention to your purchases when you pay in cash or with a fee free debit/credit card?
– Nedra Rhone, for the Atlanta Bargain Hunter blog