We all know that working out can improve your health as well as improving your finances. Just like working out, using cash as opposed to plastic at the register can also improve your health and your finances. Huh? Really...

My dear friend and mentor, Chris Clarke-Epstein, CSP, inspired me to write this post. Chris has been on Weight Watchers and has been very successful in losing weight.

Why Does Weight Watchers Work?

It's all about knowing your data. Yes, being accountable every week helps as well. Because the user is totally involved in their day-to-day data (the food they eat) they are making a coginitve decision with every bite they take. This is why they lose weight. Is this worth the points? If so, then you consume it.

There's a parallel here to saving money. For over 30 years I've thought about how long I have to work for every dollar I spend and if the item is worth the time I have to spend to earn the dollars for it. If so, then I budget for it. I have never paid a dime in credit card interest. I guess my system works. The decision has been made before I go to the store. Is it worth the time? if so, I'll put the money in my budget for it and I can buy it.

Paying Cash For Transactions

Now, the form of payment is another matter. There are only three ways to pay for something: check or debit card (they're the same, since they both deduct from your checking account), credit card, or cash. Research has shown you'll spend 20% less if you use cash. Why do you suppose that is? When you give the clerk a credit card, they swipe it and hand it back to you. You haven't given up anything, and you get to take home all those goodies.

Magically Reduce Your Spending

However, when you pay with cash it's like someone stuck a knife in your gut...and twisted it. As you count out the cash, you're thinking about all the other things you could be doing with it; perhaps paying off debt; perhaps putting it towards retirement. Now you know why you spend less with cash. 

Cash Can Even Make You Healthier

Yes, paying with cash can go one step further. According to research conducted at Cornell University, people in a cafeteria will choose more nutritious foods when they pay with cash rather than plastic. Researchers suppose parting with cash leads to more conscious decision making.

So, who would have thought that when you pay with cash you become healthy, wealthy and wise?

What are some of the things you pay for with cash as opposed to a credit card?