Bulletproof Investing

CHAPTER 9Keep cash as your king

Withdrawing cash for discretionary spending instead of using contactless payment was a life changer for me. I know most banks have apps that aid and abet society's drive towards going cashless, but that has never worked for me. Admittedly, COVID-19 also had a hand in reducing the number of cash transactions. It's astonishing to think that (according to the RBA) tap-and-go card payments now account for 83 per cent of all point-of-sale transactions. I suspect many people, if they were honest, would agree that tap and go leads to bad spending habits (and don't get me started on buy now, pay later purchase schemes!).

Knowing that any unbudgeted item must come at the expense of something else is very powerful. The choice becomes simple: if you spend money on A and B there will be no new laptop (or holiday) at the end of the year. Which one do you want? You can't have both!

BULLETPROOF TIP

Keep cash as your king

Curb your discretionary spending by withdrawing cash each week for your discretionary expenses (for example, eating out, entertainment, coffees, drinks and shopping). Once that cash is gone, that's it — you can't access any more. This helps you prioritise, and where necessary eliminate, your random spending.

The other handy hack I picked up was to cancel all my credit and debit cards, and then order new ones. This meant that any direct ...