How to save hundreds in no time with simple tip
ABOUT a year ago a behavioural psychology professor told me our propensity to spend could be 40-50 per cent higher when favouring cashless methods of payment over old-fashioned notes and coins.
It floored me. "The cashless effect" means the hesitation to spend is worn away when we're not handling money and that often causes our budgets to leak.
It's especially alarming when you consider recent CBA data showed digital wallet transactions and users up 35 per cent in 2018, while NAB's latest Cashless Retail Sales Index shows an 11.5 per cent increase in the year to August. Cashless spending at cafes, restaurants and takeaway food is up almost 18 per cent.
I couldn't get it out of my head, so I decided to perform an experiment on myself.
Over a few months, I paid for as much as humanly possible with cash. Coffees, meals, supermarket shopping, petrol and other small purchases became totally analogue exchanges. (Things like housing, bills, and major purchases were too tricky, so the card still came out occasionally).
I instantly discovered a few things:
1.I became stingier. I'd actually stop and wonder if I really needed that second coffee, or whether the nice Thai place for lunch was worth it over the cheap sandwich two doors down. Then I cracked it and started making my own lunch.
2.Cashiers were surprised to be handed cash… even, sometimes, annoyed. One barista tried to tap my $10 note on the Eftpos machine while in autopilot. No lie.
3.I shopped for food much more consciously. I started grocery shopping with a list and a budget. Previously, if the amount on the register was less than the amount in my bank account I was in the clear. But now, if I didn't have enough cash then I had to put things back.
4.Coins add up fast. We usually see coins as annoying. But take it from a 29-year-old man who still has a piggy bank - coins can turn into a handy stack of notes quicker than you think.
That was part one of the plan - pay in cash. Part two of the plan was this - every time I received a $5 note or coins as change, I'd put them aside at home.
Within a few months I had saved hundreds. It even took a welcome dent out of the cost of an engagement ring! The point? Banking convenience can be great but it sure isn't free.
Chris Kohler hosts Your Money Live; weeknights at 6pm on Foxtel channel 601 and Channel 95.