Secured credit cards are a wonderful thing. They make spending money much more convenient than carrying cash all the time. But, unfortunately, they’re almost too convenient.

When you’re asked to part with your money at the checkout counter, debit cards rid you of all that emotion. This lack of emotion, it turns out, is what gets people into financial trouble.

According to an MSN Money article I just read, credit and debit card transactions account for 56% of all in-store purchases, with cash coming in at 33%. And due to the convenience of plastic and that lack of emotion when it comes to parting with your money, it’s no wonder many people have financial woes.

If you think about it, back when checks were all we had (aside from cash or course), you always knew how much you had in your account, as you had to enter the transaction in the register after you wrote each check. Balancing the checkbook keeps you informed of your financial situation while you’re in the store. Unfortunately, the dawning of online banking makes it so easy to just assume you have the finances and worry about the details when you get home.

If you stick with cash, you can never spend more money than you have. I like the envelope system that the article describes, and I think it might even be good for my wife and me to try something like this. While we’re not having budgeting problems, we could always do a better job keeping track of our finances. Another advantage of cash is that you receive change from your transactions, which can be put into a piggy bank (or a 5-gallon water jug, in my case) for a special purpose down the road.
Something to think about anyway!