Will A Cash Diet Help You Repay Your Debts?
Once again, we are at the time of year where everyone makes New Year’s resolutions in the hopes of improving their financial circumstances in the new year. This year, most people’s financial circumstances are so bad that they do not even know where to begin setting goals; a six-figure income is not enough to keep many families from living paycheck to paycheck. The cash diet, where you make a detailed budget for each pay period, withdraw cash from your bank account to cover the expenses that will accept cash payments, and then designate a paper envelope for each category, has experienced a resurgence in popularity and caught the attention of a new generation. How effective is the cash diet at helping you pay down your debts? It depends on the details of your financial situation. Since everyone’s financial circumstances are unique, your New Year’s resolution should be to contact a Miami debt lawyer.
Adopting a Cash Only Lifestyle May Not Solve Your Financial Problems, but It Will Help You Diagnose Them
The cash diet is effective at solving some financial problems but not others; the only way in which it differs from making a budget is that your kids get to decorate the envelopes in festive colors and feel involved in the experience of sticking to a budget. Paying cash for everything (except purchases that require automatic debits from your bank account, such as car insurance and cell phone bills) stops you from making impulse purchases. If the source of your debt problems is that you swipe your credit card without thinking about the big picture and use buy now pay later (BNPL) for impulse purchases, then the cash diet may work well for you. By devoting your attention to sticking to your budget, you can put your energy into getting creative with recipes made from modestly priced groceries and the stuff that is already in your pantry. Before you know it, it will be payday again and you will have forgotten all about those restaurant meals and new clothes the old you would have splurged on. Even better, you will have some money to pay more than the minimum on your credit cards, medical bills, or BNPL purchases.
Of course, all of this assumes that your debts are due to careless spending, and this is not the case for everyone. When you spend every waking moment working and never spend on anything except the bare necessities, but your debts keep getting bigger, then trying to stick to a budget can be demoralizing. Your meager paycheck stuffed into envelopes of cash is no match for payday loans and medical bills that your insurance didn’t cover. You need a deeper solution, such as debt settlement, debt consolidation, or filing for bankruptcy protection.
Contact a Debt Lawyer About Paying Down Your Debt in 2023
A South Florida debt lawyer can help you find a solution to your debt problems when it will take more than just sticking to a budget. Contact Nowack & Olson, PLLC in Miami, Florida to discuss your case.