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Forcing Financial Discipline

In an effort to deter unnecessary spending I have started purchasing discounted gift cards from online auctions. By purchasing gift cards I force a little financial discipline into my life. Using a gift card ensures that I don’t spend more than a set amount. I make certain not to spend more than the amount on the gift card. I will not supplement the card with cash or credit cards. Once the money is gone, it’s gone, and I simply don’t allow myself to spend anymore.

So far this system has been working really well for me. I usually keep myself out of shopping malls, but when I do venture in I know exactly how much money I can spend and not a penny more. A lot of financial experts recommend using cash envelopes to track expenses. They recommend setting aside a certain amount of cash in each envelope. And just as with my system once the money is gone, they recommend not replenishing it with another trip to the ATM. I don’t like this system for three reasons. First, I don’t like walking around with a lot of cash in my purse. Second, by purchasing gift cards I still get cash back through my credit card. Third, I am usually able to save a few dollars by purchasing discounted gift cards online.

I have tried this technique with a number of stores I frequent, primarily grocery stores, pet stores, and discount department stores. I am still spending money, which can’t be avoided, but at least I make certain not to spend too much.