Why Cash Can Key Retirement Savings

When thinking about retirement savings, cash isn’t usually thought to be in the equation. Usually you think about a 401(k) or a mutual fund. However, cash can help you save money for retirement.

An important aspect when constructing a savings plan is a monthly budget. Your budget tells you how much money is going out and how much money is coming in. But if you use debit cards (or even credit cards), it’s easy to go over budget without any warning.

That’s where cash comes in.

Instead of relying on plastic, a smart idea is to withdraw the amount of money you want to spend each month. Do so at the beginning of the month and pay for everything with cash. As you go along throughout the month, you’ll have a very visible reminder of how much of your budget you have remaining.

Using this cash strategy, you’ll be surprised how much frivolous spending you can avoid and how it will automatically make you a smarter shopper.

Cash Strategy (Image: Flickr)