Which payment type can help you stick to a budget?

Sticking to a budget can just feel like a huge pain at times. I’ve been there and, unfortunately, you’ve been there. Its just the nature of the beast. In times like this I always tell myself “if it were easy everyone would be doing it”. If you’re asking yourself which payment type can help you stick to a budget?, you’ve come to the right place.

Well it turns not not everyone is doing it because I know hardly anyone that puts together a budget.

You know exactly the feeling that I’m talking about for your own budgets.

You feel so good at the start of the month because you’ve done your homework, put together a solid plan and are excited about sticking to it. You know what I’m talking about, you feel like this

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By the middle of the month you feel like you’ve lost the battle and want to throw in the towel.

You’ll get there! I’ve made so much progress in my budgeting journey and I know you can too. I’m 5+ years in and still make the most rookie moves but my budgeting process and progress have come so far.

A big part of this is choosing the right payment type. There are so many psychological and ease of use things to consider. For the non-budgeter the answer is usually pretty simple (whatever’s easiest) but if you are trying to stick to a budget this is a rather important decision.

Read below to learn some different options and who they may be best for.

Which payment type can help you stick to a budget?

I get it because I’ve been there. I’d work hard each month to put together a budget and feel good on the first of the month (I’ve even tried to use a bill payment calendar). Just a week later things are all out of sorts because you can’t remember what you spent where and what category it goes in.

I’ve been budgeting for 5+ years now and, unfortunately, the same problems still exist. Remember, as you grow and develop in your financial journey you’ll grow as well. Also, know that you aren’t alone. Americans all over the country are going over their budgets right along with you.

I know exactly the situation you are facing so will walk through three different payment types to consider. Each will certainly have their pros and cons but should give you something to think about as you try and improve your odds of sticking to your budget.

Using Cash to stick to your budget

Using cash is a great payment type when it comes to sticking to your budget. I know people who are well into their financial journey and still use cash for all transactions.

Even better, if you really want to increase your odds of success utilize the envelope method. While I wouldn’t recommend sticking with that forever (you’ll just get burnt out eventually) a combination of paying in cash with the envelope method is nearly sure to bring you success.

The pros of using cash to stick to a budget are:

• immediate feedback
• easy to track (especially if utilizing the envelope method)

While that’s a short list cash is definitely the best way to stick to a budget.

The cons of using cash to stick to a budget are:

• you may find yourself carrying a decent amount of cash
• sometimes cash can just be a pain to deal with

All in all, if you are struggling with sticking to your budget (don’t worry, I’ve been there) I’d highly recommending using cash as a payment type to help you stick to your budget.

Using a debit card to stick to your budget

Back when I first started budgeting I remember using an excel sheet for everything. It was so tedious and, to be honest, didn’t work all that well.

My wife and I have come a long way in our financial journey. Shoot, even our budgeting process and means of tracking are totally different and a heck of a lot better.

I know you’ll get there.

A debit card is something I’d consider a step up from cash. It doesn’t require carrying a lot of cash and the money comes out of your account immediately. This immediacy definitely helps if you are tracking your spending via an app or online.

Frankly, the only downside is that you don’t get that feeling of handing over cash. You know what I mean. Handing over a stack of 20s to pay for a grocery bill makes me cringe almost writing this.

Throwing in a piece of plastic? Easy peasy. Speaking of easy, this brings me to my final form of payment to help you stick to a budget.

Using a credit card to stick to a budget

I know what you’re thinking. Did credit cards really make my list?

Believe me, my wife and I have ran into issues with these before. Other people I know have too. This is why stepping into the credit card game is one you should make carefully. You look at your transactions and think

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Don’t worry though. You can always step back into debit cards or cash.

Yes credit cards are definitely the easiest way to blow a budget. However, there are definitely some good sides to credit cards.

The first one is fraud protection. You may get fraud protection with your debit card but chances are you’ll get a credit card from one of the big names (capital one, barclays, etc) and they have great fraud protection. I know because its saved me a time or two.

The second are the points you can accrue right along with your spending. These are a great benefit and one that, if you can handle it, as a great perk to doing your already planned spending.

A huge disadvantage to credit cards is that the feedback on your account isn’t immediate. If you are using some type of software or app to track your spending credit card transactions usually take a few days to register. Something to look out for!

Something to consider for debit cards & credit cards

One thing I did want to add if you end up using a debit or credit card is the use of handwriting all your transactions. This can be as simple as using the register they give you with your debit card.

While writing down your transactions is tedious, it definitely gives an “envelope method” type of feel to your spending. This approach may be too much for you but it certainly works.

Potential next steps

Now that we’ve dug deep into the payment option types I’d recommend checking out a few other resources I’ve put together to help with budgeting.

Maybe you could learn about the different types of budgets and check one out or maybe you’re budgeting with your spouse and need some help there.

Whatever it is, don’t hesitate to reach out to me. I’d love to help in any way I can.