You Are Tapping Away Your Money

Dear Fellow Financial Freedom Seeker, 

Recently my uni bestie visited me in London from Gran Canaria. She has several friends from university here so she spent her week on holiday enjoying meals out, West End theatre and nightclubs. We met one day for brunch and she told me she had been tapping her card all week and didn’t want to look at her bank account. 

This got me thinking, when you tap a card on a machine it often doesn’t feel like you’re spending real money because you’re so removed from it. It’s just numbers on a screen. You’ve never held it or felt it. 

In contrast, when you have physical cash in your hand and hand it over to buy something, you feel the loss more. This is why people tend to spend less in cash than on a card. 

We’re increasingly living in a cashless world, some establishments don’t even accept it anymore. That sets us up to spend more money. 

It’s one of the reasons Dave Ramsey doesn’t like credit cards - spending cashless makes it easier to spend frivolously, and the danger with credit is you’re spending money you don’t even have. At least with a debit card you can only spend the money you do have. 

Your One Simple Step this week is to 

Pay By Cash For One Week 

You’ll most likely find that you become a lot more cognisant of what you’re spending your money on. 

You’re more likely to spend less. 

Do the exercise for one week and then reflect on how it impacted your relationship with money and your spending. 

At the very least it will give you some insights on yourself. 

At the very best it will help you spend less and then you can think about how to manage your spending when using cards. 

The BBC found that cash spending has actually increased due to the cost of living crisis making people want to control their spending and finding it easier to manage money when using cash. 

Til next week, 

Pernia | Your Finance Travel Buddy