About a month ago, I watched a video on Yahoo about an ordinary couple who were challenged to use cash for everything they bought for one week. The idea was to find out if they would spend less when using actual paper money.
How do you feel about using cash versus using a debit card? If someone said you could have your choice of ten $100 bills or a debit card with $1000, which would you choose?
Imagine the feel and the smell of all those greenbacks. Now mentally lay each $100 out on the counter and savor the idea that they are all yours. Yours to spend however you want.
Now take a look at that debit card. Cold hard plastic. It just sits there staring back at you.
Cash is governed by emotion. You can count it, caress it, smell it, spend it, save it or savor it. You can flaunt it, hide it, bank it, give it or burn it. The point is that we have an emotional attachment to cold, green cash. Think about how you feel when your wallet is full. You have to admit to feeling a sense of accomplishment and pride, an inflated sense of well being, when you have a fistful of bills.
A debit card, though worth the same as the cash, doesn’t elicit the same response. We know the money is there. We know the money is ours to spend or do with as we wish, but there is a distance, a lack of emotion.
Who hasn’t kept a $100 bill in their wallet for weeks at a time, just because they were reluctant to break it? Why? Because once it is changed to smaller bills, it’s gone. Would you be so worried about using the last $100 on your debit card? No, I don’t think so. Using a debit card causes no emotional reaction.
Let’s suppose you are trying to stay on a budget or keep your spending under control. You go into the local, buy everything you need here, department store. You have a certain amount of money designated to spend on only what you need. If you have a set amount of cash in your wallet, you will be very careful not to spend over that amount. If you do, you know you won’t have the money to pay for it, and it’s embarrassing to have to put something back.
If you have a set amount of cash in mind and you plan on using your debit card, you wouldn’t have to be so careful. You know there is money in the account to cover anything extra you might want. So those little sales that the store puts up to tempt you, do just that. Before you know it, your buggy is full and you’ve blown the budget yet again.
Remember the ordinary couple who took the challenge to use cash for a week? They found it inconvenient to use cash for everything, especially at the gas station. They also saved a considerable amount of the good green stuff and that was a surprise to them. They didn’t realize how easy it was to swipe a debit card and go on with little thought to the money spent. Nor did they expect to have to plan for every dollar when they used cash.
Perhaps the question is, can using cash help you save money?
Then there is always the question about credit cards that actually give you cash back (you can find out about them on sites like http://www.creditcardsguidance.com/), but that is a discussion for another time…
Image courtesy of Joshua Davis (jdavis.info)
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