Why it sometimes feels painful to part with money and how to stay connected to your spending.
➜ What the pain of paying is
➜ Why spending on card may feel different to using cash
➜ Techniques to stay connected with the money you’re spending
Do you find it more painful to pay for something with cash rather than card? It’s not unusual if you do, research says you’re more aware of your spending and more likely to remember a purchase when you pay with cash.
You might know the feeling. You’re thinking about making a purchase, then you count the cash you have on you and decide the purchase isn’t worth it. It might not be the nicest moment, but that feeling can help limit your spending and prevent you from buying items you don’t actually need.
One of the problems with using a card to make payments is that it’s easier to ignore this emotion, sometimes called the pain of paying. But it’s not always possible to pay in cash and it’s definitely not that practical. So, what can you do?
Here are a couple of steps you can take.
It’s easy to tap your card and go. But knowing your bank balance – before and after a purchase – can help you make more informed decisions. It can have a similar effect to watching the cash in your pocket go down.
A lot of banks will send your phone a notification when you spend. You might not expect it, but even this small visual cue can help you connect more with the money in your bank account. It’s a reminder that you’ve spent and that has an impact on your balance.
Spending alerts can also help you stay aware. If your card is used by someone else, you’ll be notified straight away and can contact your bank to report it.
Having a daily spending limit can make it easier to keep track of what you can and can’t afford. Say you’re heading out to buy lunch, knowing how much you have left to spend for the day can help you make a better decision about what you should get.
A daily spending limit can also get you in the habit of checking your balance regularly to see how you’re doing. You can have fun with it too. Potentially any money that’s leftover can be used to add to your savings or buy a small treat.
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