Day 5: Use Cash
Unlike credit cards, where the financial transaction is paperless and invisible, when we see money disappear from our wallets, we’re less likely to spend frivolously and impulsively. This practice can save you an average 20% a year, according to credit experts. What’s more, paying with cash keeps us honest, according to behavioral economist and author Dan Ariely. So why do we struggle to pay with cash? With cash we are prompted to make smarter purchasing decisions. When we use credit cards and carry a balance month to month, we’re getting something without really paying for it or end up paying double or triple over time with all that added interest. In the end, we cheat ourselves out of our hard-earned money. “When we deal with [cash], we are primed to think about our actions as if we had just signed an honor code,” says Dan.
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