'Shark Tank' investor Barbara Corcoran explains why every 20-something should spend a week using only cash

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Business Tips from Shark Tank's Barbara Corcoran

When Barbara Corcoran set off on her own after college, moving from New Jersey to New York City to try her hand at selling real estate, she lived off money she didn't have.

Between bouncing checks and charging purchases she knew she wouldn't be able to pay within the month, she was a terrible spender.

"By my late 20s, I realized I couldn't afford the things I really desired," Corcoran told Business Insider at a recent event for personal finance resource Zebit.

"And by my early 30s I realized I had to work like crazy to get what I wanted rather than spending it before I had it."

Only then was she able to become a Manhattan real estate power player as the head of the Corcoran Group.

The advice she wished someone had told her in her 20s, she said: Spend even a single week where you only use cash, charging nothing to a credit card.

"When you put it on a credit card, somehow in that moment it seems like great value, but when you're putting cash out — you have limited cash, what you've earned that week — you're surprised at how quickly you realize how much money you're truly wasting," she explained.

There's plenty of research that suggests the average person spends more when purchasing something with credit rather than cash, including a study from Dun & Bradstreet that found people spend 12%-18% more on credit.

Business Insider reporter Kathleen Elkins tried the cash-only experiment in 2015, writing about it after two weeks and ultimately stretching it to a full six months. She found that she was able to be more conscious of her budget than ever before, because there was a more tangible feeling as she handed over her cash or saw it deducted from her checking account.

The point of going cash-only is to build the muscle memory required to spend only what you can pay off at the end of the month, even if you're using credit cards for their flexibility and benefits.

"And that's the lesson that I wish somebody had brought to me earlier," Corcoran said.

RELATED: Click through to learn about 20 unusual ways to make a quick buck

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'Shark Tank' investor Barbara Corcoran explains why every 20-something should spend a week using only cash

Dog-sitting, babysitting, or house-sitting

These jobs are always in high demand, and the best part: you can name your price and create your own schedule! Post an ad on craigslist, or use your friends' and family's connections to get your name out there. 

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Rent out your space 

List your apartment on Airbnb or another rental site, and make some easy cash by staying at a friends and renting out your place for the weekend.

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Share your space

Just as you can rent out your full apartment or house, you can also post a free room (or even just your couch!) on sites like Craigslist or Airbnb. This way you can split your living expenses -- and maybe even make a new friend!

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Sell your body parts

Now here's a weird one: Donate your hair, breast milk, or even plasma for a profit. According to Grifols, if you're healthy and weigh above 110 pounds, you can earn up to $200 a month donating your plasma to life-saving medicine. 

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Sign up to participate in medical tests and clinical trials. 

Universities constantly need volunteers to test new medicines and treatments -- and because the pool of willing participants is limited, there is typically a large compensation for being a guinea pig. 

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Participate in a focus group

Companies and organizations will pay you to join a focus group. These can be conducted in person, online, or via phone. You will most likely be reimbursed in cash or gift cards -- plus, you often get to test out fun new products! 

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Take online surveys

Similar to focus groups, you can get paid to give your time and insights on an online questionairre. Plus, you can do this from the comfort of your couch. 

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Bank on your sperm

Although we don't necessarily recommend this option, there is a very high demand for healthy sperm donors. Keep in mind some of the obvious drawbacks, but sperm donation is non-invasive and highly compensated. 

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Crowdfund your dreams

Crowdfunding allows you to raise monetary contributions from a large group of people who want to support your venture. Post your project or idea on a crowdfund site, like GoFundMe.com, and see the cash pile up.

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Become a tutor

If you're qualified, post an ad online or on a community board to tutor children on their school courses or for the upcoming SATs.

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Get a part-time job

Capitalize your free time (on the weekends or after work hours) by working a part-time job. A bartender, waiter, or Uber driver are all great options for an additional source of income -- and great tips! 

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Resell tickets

Take this suggestion at your own risk: If you're staying within legal limits, buy tickets low and sell high as an effective way to source additional money. (Just make sure to check your state and local laws first!)

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Rentafriend.com

You can sell anything on the internet these days... including your companionship! Get paid to go on a platonic outing for a few hours and enjoy your afternoon with a new friend. 

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Rent out your parking spot

Make sure to check with your landlord first, but if you have the option to park your own car further away, lend or share your parking space or driveway for the hour, day, or even month! 

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Keep a coin jar 

This one takes patience before a big pay out, but keep a spare jar or drawer for loose change that you usually toss anyway. It will keep it all in one place -- and those quarters do add up! 

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Make something to sell 

If you have a knack for arts & crafts, create jewelry or other handmade gifts to sell on sites filled with other thrifty vendors like Etsy

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Sell items online

This effective strategy requires low effort with a high return. Post photos of your used or non-used items on sites like eBay or Craigslist, and let the bidding begin! 

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Have a yard sale

Sell clutter you've been meaning to get rid of right in your front yard. This simple tactic is convenient, and guarantees a wad of cash right to your pocket.  

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Return past purchases

This tip may seem obvious, but is often overlooked: Take your recently-purchased items that are laying around back to the store for either store credit or a full refund. 

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Recycle scrap metal and cans

Collect cans and scrap metal out your own garbage, basement, and street and bring to your local recycler to exchange your findings for money.  

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