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Financial Literacy Month 2015: Advantages Of A Cash Only Spending Plan

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Donell Edwards, Blogger

DONED2014 SmallAbout Donell Edwards: Donell Edwards is President of CWR Media and is also founder and publisher of The College World Reporter (CWR) magazine and CWR World News & Information Service.  He is also a professional speaker, freelance writer, and entrepreneur.



We’re Celebrating Financial Literacy Month

Know Your Money
Wednesday – April 8, 2015

Financial Literacy Month 2015
Advantages Of A Cash Only Spending Plan
By Donell Edwards

There is an old expression that “Cash is King,” which emphasizes the importance of cash as an asset in having a positive net worth, especially when compared to credit.  Although having and protecting good credit is of great benefit, unwise use of credit will greatly reduce the amount of money or liquid assets one may have available at any given time.  

As we have stated numerous times in this blog, it must be understood that credit is not real money in the sense that when it is used we no longer have any obligation.  Quite to the contrary, we have just further indebted ourselves.  In fact, every time we make a credit purchase it is like taking out a loan in the amount of the item purchased, which in all instances must be repaid, and in most instances incurs interest.  When we use cash, we do not add to our debt and we do not obligate ourselves for interest on what was purchased.  This is common knowledge to most of us, but when was the last time you really thought about what you were doing before you made a purchase.  We live in a society that encourages us to charge everything, and it is very easy to get into the habit of credit spending.


MP900149068 - Man Using ATM


We mentioned in yesterday’s blog that research on behavioral finance and neuroeconomics indicate that to a certain extent we are hardwired to make bad money decisions.  It is our position that learning how to make sacrifices and developing great willpower helps to change one’s attitude about money and spending and contributes to successful money management.

Since most people use a credit spending plan, today we want to discuss the advantages of a cash spending plan.  We will be referring to two articles in today’s post, one is 10 Reasons to Use A Cash Only Spending Plan, written by April Borbon at TheDollarStrecther.com.   The other article is 5 Ways A Cash Budgeting System Will Change Your Life, from DailySavings.AllYou.com.  

Here are some of the advantages of a cash spending plan from the 10 Reasons to Use a Cash-Only Spending Plan:

  • You are forced to learn money management skills
  • You will learn the value of a dollar
  • The difference between “needs” and “wants” will become apparent rather quickly
  • You will stop the vicious cycle of credit card debt
  • You will actually save money

Here are more advantages of a cash spending plan from 5 Ways a Cash Budgeting System Will Change Your Life:

  • A cash budget demands accountability
  • A cash budget encourages you to carefully examine expenditures
  • A cash budget challenges you to plan ahead

So, change your behavior towards spending and put your credit cards away and start using cash for your budget.  If you are using credit cards to pay some of your bills out of necessity and not by choice, that is an indication that your budget is distressed and changes are necessary.  Although you may not be in a position right now, today, to begin using a cash spending plan, work toward implementing a cash spending plan as soon as you can.

Here are the links to the articles in today’s blog:

10 Reasons To Use A Cash Only Spending Plan

5 Ways A Cash Budgeting System Will Change Your Life


Here is today’s step to financial wellness from Thirty Steps to Financial Wellness developed by Money Management International:

Step 8 – Identify Your Starting Point



Hosting A Financial Literacy Month Event

2015 National Savings Forum

Financial Literacy Month Articles from Huffington Post 

The FoolProof Foundation

FoolProof Teacher

FoolProof Solo


If you have questions or need help we are just an email away.  Send your questions to Info@KnowYourMoneyGlobal.com


We Would Like To Hear From You.  Are There Any Brave Souls Out There Willing To Share?
If you would like to share with our readers how “bad” spending habits have affected you, anonymously or otherwise, for our upcoming special, “Confessions Of Spendaholics,” please send your experience to info@knowyourmoneyglobal.com.


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Disclaimer:  I have a Bachelor of Business Administration degree but I am not a financial adviser. However, I have acquired years of knowledge about personal money management through my life experience working through my own personal finances that allows me to share that knowledge with readers of Know Your Money. The Know Your Money Blog posts written by me are my own common sense observations and opinions and are for informational use only. Although my blog includes contributions from experienced financial professionals, please make your own financial decisions based on personal research or contact a financial adviser.


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