Way before there were bank ATM cards and credit cards, most people had a savings account and a checking account. They wrote checks for purchases, sometimes post dating them until there was enough money in the account to clear it.
Times have changed drastically since then. Now most people don’t even carry around cash in the pockets, opting instead to put most purchases on the bank ATM card with the option to post the transaction as a credit charge. (Which you should always do if using bank ATM cards; never use the debit option which requires entering your PIN code or you will open yourself up to incidents of fraud with people stealing and copying the data on machines designed to do that.)
Also, people today save less money then two generations ago, mainly because of the ease in which impulse buys can be made. It is said that a majority of people save only 2% of their income- and that’s not even including debt they may owe. ( Don’t carry debt.)
One thing my grandfather had told me at a young age was a simple process in which you can save more of your hard earned money if you have impulse buying issues.
Have you ever heard the question asked, ‘Which would you work harder at-saving ten thousand dollars or preventing someone from stealing ten thousand dollars?’
Using this as an example of the psychological nature of people when it comes to money, the plan is simply this-
Deposit your income checks into your savings account and then as you have expenses throughout the weeks or month, transfer these small amounts over to your bank card (or credit card if you use that instead) to cover them.
This does two things- it makes you aware of what you are spending on a daily basis and lets you monitor your impulse buys and adjust accordingly and the pain of having to withdraw small amounts to cover expenses and seeing that balance in your savings account go down will inspire you to really take control of your impulse to just consume and buy every time you feel like it.
You will obviously need a small roll in your checking account to cover initial and pretty common expenses like gas, groceries, coffees, the occasional wine or beer purchase, etc. If your single, it needn’t be much- 300 to 500 depending where you live whether it is New York or Amsterdam.
You can figure out how much you really need to stay alive and enjoy life a little.
And as the balance dwindles, this is where you get to really control what you spend after that. Going to movies, dinner with whomever asks and impulse buying clothes (when you already have more than enough) all add up during the month.
You will find that you will save more cash this way then just depositing your payroll into a checking account and then making a mental note as the the number your account balance needs to be at so as not to bounce your checks.
We are so distant from the concept of money as cold hard cash, that it has almost become an abstract figure; a sequence of numbers that mean little to us.
You can always do the old school method of cashing your checks and walking around with a big wad of $100’s. The pain of peeling those away for purchases may make you re-consider your purchases.
Unless you can handle two guys jumping you and have lightening fast crush & destroy fight tactics to get away fast, I wouldn’t really recommend option two.