Everyone knows that sinking feeling that you get when you see your monthly credit card statement. You went out with your friends a few too many times, charged way too much on your card without really thinking about it, and now you’re in the hole going into next month. If you don’t get your credit card balance under control soon, you’ll be under a mountain of debt in no time.

What can you do to keep this situation from happening in the first place? Well, one step you could take is pivoting to only using cash for your spending money. This system, called a “cash diet,” is a great way to take direct control of your finances, and it’s brilliant in its simplicity. Why does it work? Simple psychology.

Spending What You Have

Humans are funny creatures. We’re very averse to parting ways with the things we have in our possession, but we don’t apply that to things we can’t see. So, when you’re spending money via a credit card, you don’t experience the same psychological aversion you’d get by pulling dollar bills out of your wallet and counting them out.

This process of producing your money, counting it, and handing it over makes spending much more deliberate. You have to actually count out your spending money and consider it, directly, unlike when you’re just swiping your card and going on your way.

Keeping Count

Another great effect of using cash instead of spending from your card is that you’re actively keeping count of how much money you have. The process of more deliberate spending means you don’t need to check an app to see how much money you’re going through.

Keeping that close count on your money helps you to plan out your spending for each paycheck, keeping you from going through all of your spending money in a single night. This, in turn, can make you more thoughtful about your money.

Natural Stopping Point

When you’re out of cash, that’s it. Don’t spend any more money that pay period on anything that’s nonessential. Use your card just for things like bills, groceries, utilities, and gas. Don’t try to end-run your own system and sneak spending on your card here and there: the system only works if you stick to it!

But, with a powerful system like the cash diet in place, you should find it easier to be mindful about your money and keep from blowing through your paycheck before you’ve even earned it.