Asked by Anonymous
Asked on 14 Feb 2019
Yes it does in general for the whole population. The same reason why casino uses chips. There is mental separation between us and our money.
"Convenience" also means easier to spend money. And businesses wants u to part with your money much more easily. =D
I do agree that we tend to spend more/faster when moving towards cashless. More disciplined required when it comes to spending.
An example will be my gf (choose not to own a single credit card), who makes it a point to go to the ATM to withdraw S$100 every sunday. This S$100 will last her for the entire week till Sunday, including meals, transport and any daily expenses. She did explain that it helps her to save more as she finds it a hassle to withdraw money from ATM, and also the psychological factor that the money in your wallet is decreasing and you need the money to last for X number of remaining days.
I agree, because #shoeleathercosts.
Cashless spending is alot more frictionless - we now can swipe/tap/paynow/paylah etc to vendors, without thinking too much about how much money we now have left in the wallet.
Spending money becomes easier if we go cashless. However, I believe that it is just an excuse that people use when they overspend. If we have the discipline to track and manage our own finances, then it would not matter whether we go cashless or not.
I have apple pay and find it extremely convenient to use. So I would say that going cashless definitely encourages me to spend money faster. Gone are the days of spending within my ‘limits’ aka the amount of cash I have in my wallet.
However, for a while I had to control my spending by exclusively using cash and I did find a noticeable difference on my weekly expenditure.
I went from an average of about spending $300 a week on both apple pay and cash, to about $250 a week on cash.
Well, it varies from person to person. It can happen sometimes but most of the times, its not the same. Going cashless has only advantages to offer. The ease and convenience offered can sometimes result in more than usual spendings.
Yes. There will be a tendency to spend unconciously, if you are just starting out with cashless system. The act of retrieving money from ATM & counting it out. actually helps to act as a buffer for you to think before actually buying an item. This is especially true if you are an impulsive spender.
That said, if you get use to the system, have been using cards for a long time, you can set up your own buffers with regular routines to stop yourself from spending too much. If you are a control freak like me, the cashless system actually makes it easier for me to Budget, because everything I bought is accounted for & recorded. The biase thinking that you will spend more cashless, actually makes me even more careful when I'm spending.
As I've once hear (regarding another technology) "when first adopting any new system, you will find it more difficult and you'll probably find it less efficient & less cost effective, but once you get used to it and learn how to use it to your advantage, the efficiency and cost savings will more than make up for the inconveniences during the starting period."
Conclusion, whether you'll spend more or not really depends on the individual, their financial habits. There are actually different cashless systems out there. if you are the type to spend uncontrollably, use a cashcard instead of a credit card. it's still cashless, but you can't spend more than what's in the card.
I would really like to see payment systems that allows you to set your budget on how much to spend and gave reminders at point of payment that you exceeded your budget before getting permission to go ahead and pay for the item, etc.. Anyone technologically savvy enough to do this out there....
Top Contributor (Aug)
It is certainly more tempting for most people because you do not feel the physical cash and you do not have to go ATM to withdraw cash. All is done at the tap! When it is so easy to spend, people tend to be less penny pinching. But not to say it is not impossible to control spending, it will still take effort to track spending and be concious of it. So download seedly app now!
Top Contributor (Aug)
Absolutely. Not as pain to swipe or tap card instead of manually withdrawing money and seeing your wallet get thinner after a transaction.
But velocity of money or the increased speed of transactions is good for a healthy economy. Plus, its much easier to track a country's spending when everything is cashless. Plus legal tender is expensive to handle as well for security reasons.