Still Doing the Majority of Expenses in Cash? Here’s How You Can Manage It

Whether you are a newly-wed couple, or a professional in 20s, or are middle aged, cash flow management should always remain a top priority. Some people are so accustomed to their financial habits that they don’t wish to explore any unknown territory. So, here in the article, we have provided cash management checklist for all those who want to save more and earn more.

Let’s look at a few benefits and disadvantages of using hard cash in today’s times:

manage cash expenses

Benefits of cash payments

You can avail of many benefits of dealing with cash such as:

  1. Customers have total privacy when buying medicines or other goods by paying in cash.
  2. You can carry cash without additional responsibilities like remembering the ATM pin.
  3. Since it offers the highest liquidity you can be saved from situations like no cash available for withdrawal in ATMs or card not being accepted at an outlet.

Disadvantages of dealing in cash

Like any other form of currency, cash too carries its own set of disadvantages:

  1. It is prone to theft and threat to life when you carry cash.
  2. It involves quite a bit of labor costs to do bookkeeping and maintain records.
  3. Dispute resolution becomes challenging as there are no records maintained in cash transactions.
  4. It may be cumbersome to carry cash for large value transactions.

How to manage cash?

1. Build a good cash management infrastructure

Safe for storing cash – It is a wise move to have a safe for storing money that you receive as cash.

Cash documentation – It is important to write down cash transactions and maintain a record in some place.

2. Create an investment philosophy with cash

Investing with cash is a bit of a trouble these days as most of the investment options are dematerialized. Deposit your cash in your bank account and start investing in instruments like fixed investments, mutual funds, shares, gold etc.

3. Utilize technology

You can download technology solutions like personal finance app to manage cash expenses and income. By regularly feeding in data and setting a budget, you get a good picture of your cash spend, saving and investment. Category-wise spending charts help you understand your spending pattern better. This can help you monitor your cash spends better and help you in better structuring your spends.

A good dependable mobile expense tracker app is a great way to get clear visibility on what is coming in and what is going out. You can see how much you are saving or how much you are spending.

With a cash management app, budgeting becomes simpler and monitoring the cash outgoings and incomes become simplified.

To conclude

Our word of advice is – live within your means, stay out of debt, and utilize a great cash management app to tide over your cash management woes. Cash management is a tricky subject. So, handle it with due diligence and care.