Shopping on a budget is wise, but it can have pitfalls. If you use anything other than cash to pay for your purchases, you could be derailing your efforts to budget and save. Avoid the pain of racking up unnecessary debt by learning some easy ways to stay on track.

The Plastic Problem

Using a credit card to pay for purchases can be costly. Using a debit card when you’re shopping on a budget can be just as disastrous, because it’s easy to lose track of how much you’re spending. According to Sound Money Tips, people spend more when they pay with plastic. When you withdraw cash and use it for purchases, you are aware of how much money you’ve gone through. When you pay with a debit card, however, there is no physical reminder of how much you’ve previously spent.

It all boils down to this: paying with plastic feels painless, but it’s not. People can and often do suffer the consequences later by spending beyond their budgets and racking up debt, but that does not have to happen to you.

The Benefits of Shopping with Cash

According to research published in the journal Neuron, paying with a credit or debit card tends to take away the pain of spending money. When study participants were given $20 cash to spend, pain sensors in their brains were activated when they saw prices that were too high. With debit and credit cards, you don’t have to part with any physical bills to make a purchase, so it doesn’t feel as much like you’re giving something up. Shopping with cash is a better alternative.

7 Steps to Shopping on a Budget with Cash

1. Review your shopping budget. Before you shop, know what you can spend. Make sure your shopping budget is in line with your saving and spending goals.
2. Create a shopping list. Always know what you are going to buy before you buy it. Shop with a list, even if you are going to purchase a big-ticket item. The list will keep you on track.
3. Make a withdrawal. Withdraw the exact amount of cash that you need to make purchases from an interest-bearing savings or checking account.
4. Investigate saving opportunities. Be on the lookout for sales, discounts, coupons, and local merchants for deals and savings opportunities for things on your list before you make a purchase.
5. Prepare to spend wisely. With your list in hand, coupons if possible, and cash in your wallet, prepare to shop—but leave your plastic at home. Don’t tempt fate and take it with you.
6. Ask a retailer. After you have checked prices, looked for deals, and found the item or items you want to purchase, take an additional step: ask the merchant for a discount for paying with cash. When you pay with cash, the retailer also saves on credit and debit card processing fees. Remember, if you don’t ask, you won’t receive.
7. Make your purchase. Purchase your items and enjoy your savings.

Shopping on a budget can be easy if you plan and prepare. Not only will you save money by shopping with cash, you will also avoid busting your budget and racking up debt.

Image source: Flickr

This article was syndicated and originally appeared on the CESI Debt Solutions website.