Today I heard a couple saying that they had to cut off so many household services such as the Internet and phone because the husband in the family has suddenly been laid off. Therefore, they needed to adjust non necessity spending immediately. I was kind of surprised at how fast they decided to do it as usually in that situation you would expect people to go into the savings and try to live off that until you can find another income source.
Apparently they couldn’t do this because they were already in massive debt and so this time they didn’t really have the flexibility to risk keeping a lot of non essential services with no income coming in. That made me wonder how different their situation would have been if they had this kind of urgency from the start in terms of adjusting their finances and spending as oppose to spending the same for awhile with the mindset that you will just pay it off as soon as you find new work.
That is usually the only advantage I see for people that are forced to go with a cash only budget as it requires you to adjust your spending right away as there is no credit to allow you to overspend in the first place. For myself though, just constantly keeping updated and looking at the raw numbers of how much money is going in and out of your account is enough motivation to make you adjust your budgets right away.