It seems that most of us know that we will spend less with cash. A recent MIT study found that subjects that were asked to bid on a basketball game, bid TWICE as high when they used credit cards, versus when they used cash. Not surprising. An easy to believe cash and credit card experiment. One way to look at it is that when you are using your credit card, you aren’t really aware of how much debt you have, so you figure, “Why not spend more?”. It’s like when you are dieting and you eat one piece of pizza. You then think, “Well I already messed up my diet today, I might as well have another piece of pizza and another piece of pizza.” Next thing you know, you ate the whole pizza pie! Ok maybe not the whole pie, but you definitely ate more pieces than you should have.
The point is that if you want to become more conscious of your spending and money, using cash is really one of the best ways. You really don’t want to eat the whole pizza pie do you?