Which Payment Type Can Help You Stick to a Budget?

Everyone has the dream of having financial success and independence and fulfilling all of their dream purchases. But making money and saving money are complicated tasks. 

Budgeting can seem complicated, especially for those with no experience with it. However, you can use some tips and tricks, along with payment types that are better than others, if you want to save some cash. 

In this article, we’ll explain:

  • Why is budgeting hard, and why is it important?
  • What are the worst payment methods for budgeting?
  • What are the best payment methods for budgeting?
  • Which tools can help you budget?
  • What types of budgeting systems exist?
  • How can you create and stick to a budget?
  • How can you gain a better financial position with Infinite Banking?

Let’s find out which payment type can help you stick to a budget!

What Makes Budgeting Hard, and Why Is It Important?

Firstly, budgeting is tricky by itself. Also, people make many minor mistakes when determining their budget, which deters them from budgeting in the future. Lucky for you, we have some essential budgeting tips for you on what to do and avoid, but more on that later. 

Next, budgeting is often problematic for many consumers because their preferred payment type isn’t a good option for budgeting. but which payment type can help you stick to your budget?

For example, credit cards and loans leave you with a debt you need to pay, making it hard to stick to a budget and save money

When creating a new budget, most people don’t track expenses and stick with budgeting methods that don’t suit them. 

Lastly, most people create a budget that’s too strict. It would be best if you had self-discipline, but also flexibility. 

But why should you budget?

No matter how much money you’re making, budgeting is a way to ensure that you’re financially healthy and that your funds are going in the right direction – towards your financial goals. 

This way, you can ensure your financial freedom. 

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The Worst Payment Types for Budgeting

Let’s start with some of the worst payment types you can use if you want to budget. As already mentioned, loans and credit cards are less than favourable, but we also have a newer type of payment method here. 


Having a loan means that you have a debt, and debt payments can disruot your budgeting. 

Additionally, people often take out a smaller personal loan when they’re low on money because it gives them a false sense of security. This is escapism, and it won’t help you stick to a budget. 


Cryptocurrencies are one of the newest payment types, and they aren’t used often. However, it’s safe to say that they aren’t the best payment type for budgeting. The regulations don’t exist yet, and it’s precarious and not accepted everywhere. 

Budgeting with cryptocurrencies is a no for now. 

Credit Cards 

Lastly, a credit card. They’re arguably the most common payment type out there, but is a credit card they good for budgeting?

To put it simply, no. Similar to loans, credit cards come with credit card debt. Also, the credit limit often leads people to spend money by giving them a false sense of security, when they should stick to a budget and pay attention to their credit card statement and the billing cycle. 

A credit card can be used for budgeting only if you’re very disciplined and have strict spending habits that won’t affect your credit card debt too much. Keep in mind that if you use a credit card, you have to pay a high interest rate on it.

A credit card comes with some benefits, such as more cash flow, letting you make big purchases or pay bills in case of emergency. You can build a credit score, and some come with cashback, which is considered the best feature by 40% of Americans

On the other hand, the feeling of limitlessness can lead you to overspend when if you don’t pay attention, which is terrible for budgeting. Pay attention to the dates and ensure you’re making your minimum payment for you credit card.

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The Best Payment Types for Budgeting

Now let’s see which payment type can help you stick to your budget and avoid debt. These options, like cash and debit card, limit your overspending and have other perks that come with them. 


Cash is undoubtedly the best payment method for people who have just started budgeting and saving. This payment type comes with a finite amount you can spend, so it’s an excellent choice to prevent overspending. 

It also doesn’t let you make impulsive buying decisions on the Internet like debit cards and credit cards do, and, according to research, paying with cash can feel unpleasant, which can train your brain to reduce spending as much as possible. 

People often use the envelope method for cash budgeting. They withdraw money from their bank account and keep it in separate envelopes. Each of these cash envelopes is labelled by function and has a predetermined amount of money in it.  

Paying with cash also means that you have no maintenance fees or interest rates to pay, except for basic fees for your checking account. 

The most significant drawbacks are that cash isn’t always safe, and you need a safe place to keep it in. Also, some stores don’t accept cash payments. 

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Debit Cards 

A debit card is more similar to cash than to credit cards, since it doesn’t come with credit card debt, but it can be over-drafted, which leads to overdraft fees. 

A debit card is a good option if you want to stick to a budget because it also come with a predetermined amount of funds you can spend from your bank account, just like cash. 

An overdraft on a debit card can happen when a purchase exceeds the amount of money in the checking account, leading to overdraft fees. These overdraft fees generally have high interest fees. 

Regardless of the overdraft fee, a debit card is better than cash because you don’t have to carry a lot of paper money and change around, and they’re also safer. Debit cards also have great fraud protection. A debit card also lets you make online purchases with your bank account. 

That being said, it’s easiest o segment your money and budget it when it’s in front of you. Also, debit cards can’t boost your credit score, and they don’t come with rewards. 

Online Payments

Online payment methods via PayPal, Venmo and similar websites are also modern alternate payment methods. 

You can use them to send money to people or pay for online purchases. Since you have to transfer funds from your card to them, spending is predetermined. Some of them, such as Venmo, also have daily transaction limits.

These P2Ps, peer-to-peer payment methods are used a lot, but they aren’t necessarily a good option if you want to stick to a budget because they can only be used online. When it comes to budgeting, they have to be used in combination with something else. 

Mobile Wallets

To put it simply, mobile wallets and Apple Pay are digital credit cards and debit cards. 

You only need to connect your smartphone to your cards and bank accounts via the app, and you can use your phone to pay for things via digital payment. The data on your mobile wallet is protected with verification like fingerprints and the app lets you track all your transactions. 

When it comes to budgeting, a mobile wallet is only good if you’re using it with your debits and not your credit card.

As we mentioned before, a credit card has more drawbacks than a debit card regarding budgeting, so keep that in mind when going for that Apple Pay. Paying attention to late fees and the interest rate is just the beginning. You also need to be very disciplined.

ACH Payments

Automated Clearing House, also known as AHC, is a system that creates transfers from one account to another. This lets you transfer money, pay your bills, credit card bills, student loan debt and similar things online. Most financial institutions offer the option of ACH payment as a part of their deal so you can easily pay credit cards and other bills.

ACH payment is safe and an excellent way to pay bills because you can set up a billing cycle recurring bills. However, there are some concerns about the safety of your checking account information for these online methods. 

Also, when you use ACH payment there’s less awareness about your account and your money in it. 


Writing a check is one of the more traditional ways to stick to a budget, but it’s slowly dying out because of modernization. If you want to budget, you could still write a check. You need to make both digital and physical copies of it. 

Money Order

A money order is more secure than cash, but they aren’t as convenient. Yes, money orders don’t require a translation made by the bank, but you have to pay for them in person. 

Money Market Account 

Money market accounts are an excellent option for investments and emergency funds, and they earn interest on top of it. They certainly shouldn’t be the only budgeting method you should rely on. 

It’s essentially a savings account with higher rates. They’re a good option for saving money, though. 

Tools to Help You Budget

Now that you know the basic information about which payment type can help you stick to your budgeting, it’s time to get into the different budgeting techniques. 

Some tools can help you on your budgeting journey, and we decided them into two options. 

Traditional Budgeting

First up is traditional budgeting. 

If you’re using an all-cash system and don’t want to rely on technology to stick to a budget, this is the way to go. 

We already mentioned the cash envelope system, but there’s also the 50/30/20 method. 

The envelope method, as the name suggests, is based on envelopes. You take money from your checking account and separate it into envelopes. Each envelope is labelled with what the money from your monthly budget should be spent on. you can’t get more money until your cash payday. It’s a very rigid system to stick to a budget.

The 50/30/20 method is a pretty rigid system. Half of your money should go to essentials, 30 per cent can be sued for non-essentials, and 20 per cent goes towards savings. 

Both of these methods are good on their own, although using only cash can have its drawbacks. 

Budgeting Apps 

You can also turn to technology to help you stick to your monthly budget. 

There are plenty of money-saving apps that help you budget and help with tracking expenses, analyzing  habits, and even saving your money and further investing it. 

Apps like Mint and websites like Tiller let you track your expense and plan your budget accordingly. You could also use apps like Digit or Acorns to help you run investments and savings accounts. 

Budgeting Systems

There are more than just one budgeting system that will help you stick to your budget out there. Individuals and businesses use them, and you can test them out if you want to. Maybe they’ll work for you. 


The first step is to research the activities you need to do to achieve your financial goals. This way, you know your monthly expenses and budget accordingly. 


Incremental budgeting is based on data from last year. You have to track your expenses and now the figures for this type of budgeting. This way, you can determine the budget for the whale the following year. This method is straightforward, and that’s why it’s used the most. 

Value Proposition

Noticing anomalies in a credit card statement or similar data needs to be resolved immediately, so there aren’t any long-term effects. You need to question all budget amounts and if they’re good enough. 


This type of budgeting is used in retail. It starts with an assumption that the budget is zero and needs to be built on. All expenses are justified in this system. 

How to Create a Budget

Now that you know everything about budgeting itself, it’s time to get into action. Here’s a little step by step guide on how to create a budget. 

Know Your Income and Expenses

The first step you need to take is to know your income and expenses. 

List your income, bills that you know the amount for, and other similar things. How big are your lying expenses? Do you need to pay that much for them, or is there any room for savings? 

Set Your Goals

What are your financial goals? Do you want to save money? Or do you want to create an emergency fund?

When saving money and budgeting, the biggest mistake someone can make does not have a goal. Goals help us visualize what we want to do and impact our budgeting. 

Create a savings goal to determine how much money you want to put aside. Make sure you have sufficient funds for essentials, like grocery shopping, and also fun money and extra money for unexpected costs.

Build a Budget

Next up is the most exciting part: building a budget. This is a lengthy process because you have to pay attention to details while creating your spending plan. 

Besides your income, your budget should be built based on your spending habits and financial goals, and it could take some time. Determine how much money you want to spend on each aspect of your life and stick to it. 

Don’t be too rigid, and don’t be afraid to experiment. 

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Track Expenses 

Many people forget to track their expenses when budgeting, but this is immensely important if you want to create a better budgeting strategy for the future. If you track your expenses, you can see how much money you’re spending on food monthly and determine whether you can save a portion of that money. 

Monthly Review 

At the end of every month, you should look back at the past expectations and realities. This can help you analyze your budgeting and determine which parts can be changed for the better. 

Don’t Give Up!

Lastly, don’t give up! The budgeting system is tricky, and it requires a lot of self-discipline, but it’s a way to reach your financial ideals. It may seem complicated to stay motivated when your budgeting techniques aren’t working, but don’t be afraid to experiment and follow your gut to see what works and what doesn’t. 

Create achievable goals, a realistic budget and set benchmarks you can easily reach. Stay motivated, and stick to your budget!

Gain Financial Independence With Infinite Banking

Saving money can seem like a scary and long-term process. But some things can help you out immensely, such as the Infinite Banking Concept. 

The only thing you need for this process is a Whole Life insurance policy. 

Here’s how it works. Infinite Banking is a strategic method for utilizing your life insurance to create an endless banking system. To put it in other words, Infinite Banking means being your banker, just without the high fees and interests that aren’t good for you.

When you own an overfunded life insurance policy, you can borrow money from yourself using your policy’s cash value and repay it later. When you borrow money from yourself and pay it back with the set rate of return, you’re becoming your own bank. 

Infinite Banking involves:

  1. Overfunding (with after-tax funds) a high cash value life insurance policy from a life insurance company.
  2. Accumulation of Cash Value (tax-free) throughout the years you are a policyholder of your life insurance policy.
  3. Tax-Free Loans taken out against your life insurance policy’s cash value to use for your financial expenses.

All of these culminate to create your bank. Even when you take out a loan and spend that money elsewhere, your Whole Life insurance policy still earns dividends. 

Infinite Banking is an excellent step to take if you want to reach your financial goals, control your finances and build wealth using the life insurance policy. 

Final thoughts

The budgeting process is a challenging task, but there are some things that you can do to make it easier. One of them is choosing a payment method that’s best for budgeting. Not all of them are the same, and some are more harmful than others. 

We hope that this article will help you choose the best payment type for your budgeting and that now you know even more things that could help you along the way. Also, we hope that it made you interested in the concept of Infinite Banking with Whole Life insurance. Good luck with your financial journey!