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If you think using a checkbook is “old school,” think about what it was like to only use cash. Debit and credit have become so commonplace that paying with cash seems to take cashiers back a second, almost in disbelief. It's just so convenient to swipe your bankcard these days, especially if you're trying to get through transactions quickly. So why would anyone use cash? The reasons might surprise you.

Studies show that people spend 12-18% more when they use plastic (not including fees) and a study done by McDonald’s showed that people using credit spent 80% more than someone using cash. There's just something about using cold hard cash that causes you to think twice before you spend.

How Using Cash Can Help You Spend Less and Save Money

1. Cash Gives You Better Control of Your Budget
You've heard of the envelope system before. It's a way of budgeting your money with envelopes for categories like groceries, entertainment, eating out, and other bills. Each month you fill the envelopes with the allotted cash for that category and only spend the money from that envelope. If you're going to the store, grab the envelope and spend only the money inside.

Why it works: You can't spend what you don't have when you're on a cash budget. I know we've seen tremendous changes by using cash when spending money at the grocery store. It helps me and my spouse to keep focused with our two person, $250 per month grocery budget and keeps us from overspending.

2. You Don't Get Charged Interest
I hope you don't carry a balance on your credit cards each month. The interest charged for credit cards can be a staggering 28% or more. Using cash eliminates the chances of missing a credit card payment and being charged interest on last month's purchases.

3. Using Cash Could Mean More Discounts
Did you know that stores get charged a fee to accept a payment via credit? Most large stores like WalMart and Walgreens don't worry about the charge, but small stores in your community love to accept cash over credit because of the fee that comes with accepting credit cards. Ask the store if they give a cash payment discount. It's more popular than you think, and you never know until you ask. My wife and I saved 5% by paying for a piece of furniture with cash, savings that I would never have know about unless I asked and came prepared with cash.

4. Cash Helps Control Impulse Spending
When you shop with cash, you know that you're limited to what you have in your pocket. This helps you to stay focused on your list, ignoring the temptation to add extras to the cart. Without a credit card, you really have to stop and ask yourself, “Do I have the money for this?” That's something we should always do, but it's just so easy to swipe a card and assume that it'll all balance at the end. Using cash can help you to become even more disciplined in your spending and leave you with a feeling of financial control at the end of the month.

5. Keep the Change for Something Big
I know some of you are probably thinking, "I don't like using cash because the change is annoying to handle." My wife doesn't like change because it makes her purse heavier, and I don't like change because I don't like storing a bunch of change in my pocket. If you can bear the annoyance until you get home, put all the change into a jar or can. We saved a small glass jar full of nickels, dimes, and quarters and socked away $75 in a matter of a few months. Use that as your fun money or for whatever you want.

While cash may not always be the most convenient thing to use, it does help you to control spending and sometimes leads to a discount at stores. Who knows, that might just make it something worth trying!

How do you feel about using cash? Is plastic more convenient? Do you think that using cash could help save you money each month?

This has been a guest post by Tim from Kirksville, MO
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