3. You Only Have a Vague Idea of Where Your Money Goes Each Month
Always paying with a debit card won’t get you into debt like relying on credit—but if you’re still not keeping tabs on your transactions, you could find yourself in hot water. Even all-cash dieters who don’t diligently watch their spending might visit the ATM a few too many times each month.
Bottom line: Not watching your daily spending won’t necessarily dig you deeper in the hole, but mindless spending can prevent you from having funds available to save, pay off debt, or use in an emergency. And that keeps you from getting rich.
What to Do
If you don’t already have a budget, the first step is to create one. With that in place, you can set up systems that make it simple to stick with it.
Prefer plastic? Consider an app like Mint, Mvelopes, or Personal Capital that tracks and categorizes your expenses for you. If you like cash, you might give the physical envelope system a try. Each week, you stuff different envelopes (labeled “lunch,” “gas,” and “prescriptions,” for example) with money, based on the categories and values in your budget.
“You go to the bank at the beginning of the week and take out the cash you’ll need to for all purchases throughout the week,” Gavlak explains. Then when you’re out, you’re out.
