I have been using the Cash Clips System for 2 months and I absolute love it. I gave me a better control of my spending, and I can feel the emotion every time I pull out cash to pay for my coffee, snacks, and dinner. The benefit of using cash is to allow myself to physically feel the pain when I spend the hard cold cash; therefore, I will eventually spend less in the long term. I would not have the same painful feeling when I keep swiping my credit card, and I would probably feel the pain for a short moment when I open my statement once a month. We all tend to spend more when we use a credit card, because it’s not doesn’t hurt us emotionally. For a super hardcore self-disciplined individuals, using a credit card would not put a dent to their statement. For the free spirit like myself, I will rather stick with cash.
I would lose my opportunity of getting 1 % cash back from my credit card
I will very much willing to forgo my 1% cash back from my credit card company if I end up saving up more money. A few dollars every month adds up to hundred every year, and this is the free money I could have pocketed myself. This is the cost of saving money, and there are no different than paying for gym membership. I am paying to get my financial fitness.
What is Cash Clips System?
I first heard this clip system from a video I found on YouTube, and it changed my life. I am sure you have heard of the envelope system. It is very similar to the envelope system, but I would use colourful clip to divide cash in my wallet instead of putting the cash into each envelope. Each colourful clip represents one type of spending. For myself, I only have two clips to represent two categories – Personal and Family. This is two categories I tend overspend every month.
At the beginning of the month, I would withdraw money from my bank and keep the whole month of personal spending my wallet. To be honest, I need a few months to create an important habit for myself to only spend the money I have in my wallet. It’s not as easy especially during the holiday season. But gradually, I feel the habit changed. I am now a lot more conscious on where my money goes, and I will stop making the unnecessary trip to the coffee shop during lunch time with coworkers.
Have you tried to save up money for your trip or down payment for your new home, but the needle doesn’t go anywhere? If so, I will encourage you to try this clip system. You probably would get the weird glance in front of the POS when you try to pay with cash (or they don’t have enough changes in the POS for you), but let me tell you. It’s well worth it!