When it comes time to shell out some dough, which method do you use – cash or credit?Cash may not be king for payments, but it can give you a better sense of how much you’re shelling out..
While there are now plenty of other options – credit, debit, Google Wallet – the main methods still breakdown to either cash or other. We’re willing to bet that the majority of you now use the “other” option to pay a majority of your bills, but what would happen if you could ONLY use cash?
An interesting article appeared in Forbes this past week, where two experiments focused on the spending habits of students and summer interns. Performed by Tufts University and MasterCard, the premise of the experiments were that subjects could only use cash or plastic, depending on their group. The Tufts experiment forbid students to use ATMs, instead making them rely on actual bank tellers for cash withdrawals during the duration of the experiment. Meanwhile, MasterCard did allow their summer interns to use ATMs if they were running low on cash.
So, what happened? While there were the usual inconveniences of having to always make sure they had enough cash when they went out, all participants said they gained a heightened awareness of money and it made them more aware of their spending behaviors.
What’s our take? Obviously, restricting yourself to only using cash is not always the most appropriate method for helping you to save money. Certain goods and services can only be purchased with electronic means, such as airplane tickets, goods from online retailers, etc. Also, you need to always ask yourself if it’s a good idea to carry a lot of cash (or publicize the fact that you’re doing so) as it could land you in some sticky situations if you were accosted by some individuals with ill-intentions.
Yet, this method really may help you curb your spending habits, as money will take on a bit more tangible value. When you’re at a store, suddenly $50 isn’t just a number you can swipe away with a card…it’s physically coming out of your wallet!
Readers, do you think only carrying cash is a good idea, and would it make you more aware of your spending habits?