I was with another person while doing some shopping the other day and was at first so shocked that he took out a $100 bill to buy like a $10 item. The funny thing was I wasnâ€™t so shocked at the fact that a $100 bill was used but instead was wondering why he didnâ€™t use the credit card to get free points/cashback.
The reason was that he was afraid to use the credit card as he found that when he uses it he is more likely to spend more money than he intended. I then threw out the idea where if that was the case he could try using the credit card and then just go to the bank and pay off the bill by the end of the day. Course, that idea would only work if your bank has no service fees in these scenarios.
To me, even if you arenâ€™t technically gaining a lot financially the financial management skill you would be teaching yourself is priceless to get you in the groove of only spending within your budget and actual funds. I know for myself I always start to think about my bank account while comparing the value of what I intend to buy at the same time.
Basically, I never go shopping without having that bank digit stuck in my head which in a sense is exactly like you physically seeing how much cash you have in the wallet and are limited in spending. This is opposed to the dangerous way of using a credit card where usually people simply think of how much credit limit they have and then thinking about how much they get paid every week/month to determine if it is feasible.
That way you could get some immediate feedback about your daily spending too that should spruce you up fast. Example, are you the type of person that dines out like crazy and putting everything on your credit card which creates a massive debt? Try paying it off the same day as if you were using cash at the restaurant. This would not only make you think twice as you start to see like the $20 in food bills everyday but at the same time you will get in the habit of wanting to use your credit card responsibly. You will start to use it more in correlation with your actual funds and not your credit limit.