If you have taken any sort of finance or even business class in college, the discussion of what money is will certainly come up and will try to be explained by some abstract idea. The discussion may then evolve into some kind of theoretical exploration into what many different forms money can come or be in. I don’t want to bore you with that entire discussion because you probably have a good idea of what money already is and you probably know how to spend it. However, you may be looking for ways to better manage it and/or account for it.
I have always been the type that saves money and claims to be completely broke even if I have a healthy bank account balance. After several years, I figured out that I would tell people this because of my spending priorities. Was I willing to spend some of my hard-earned money on that activity or purchases? Nope - therefore I am broke because I do not want to pay for it; despite actually having the money to. I have always been amazed at how my peers and others can spend their money so quickly with little regard to future consequences (good or bad). The culprit to this free-flowing of funds – cash.
Cash is money in every sense, but can be a very bad unit of accountability when it comes to tracking it and knowing where it all went. Think of the last time you had $50 or even $20 cash in your wallet or purse. Could you account for what you spent every penny on? I know I couldn’t, but that is because it is difficult for me to even remember that last time I carried cash. Because of the lack of accountability of cash, it may difficult for you to know what you’ve spent your money on and ways you could cut back to pay down other bills or contribute some type of savings. There is a way to regain control of your spending and be able to better account for your money – a credit card.
Many people associate credit cards automatically as debt, but rather think of them as a form of payment, just like cash is. Credit cards are almost as universally accepted everywhere just like cash is, the benefit is the ability to account for the money you have spent each month via a monthly statement. The monthly statement gives you a visual and mathematical accounting of your charges each month. This allows you to actually see where your money is being spent and find areas of improvement if necessary. Some issuers also provide categorized monthly and year-end statements for better accountability. It is also important to know that we champion using credit cards for purchases on the basis of paying the balance in full each month (not spending more than what you have) and many credit cards offer rewards on the purchases you make.
While cash certainly has it’s place, using a credit card for your purchases will provide you with better accountability of your money and the added satisfaction of earning a reward on every purchase you make. Good luck in your better financial future!
