Today, the popular and most common way to carry around our money is by storing it all in a plastic card. Because of this, the increasing population is now more familiar with ‘tap and pay’ rather than cash and coins. This can and has lead to the value of money and the ability to make tempered financial decisions lost on my minds.
A study* conducted in 2008 found that individuals spent more when using credit cards as opposed to cash. Why? One important reason was the perception of the individual in relation to the money changing hands. For example, a cash-based payment is tangible – the piece of paper that you hold in your hand has value attached to it. When you spend that piece of paper, you are aware of it leaving your possession (have you ever played Monopoly with real cash?).
A cashless society has its benefits to both businesses and consumers. But as you’ll see in Adam Carroll’s TED Talk, it may mean we need to focus more on financial literacy from a young age to combat the ease in which we find ourselves interacting with ‘tap and pay’.
It is important to remember as well that your financial decisions have a large impact on the financial attitudes and behaviours of your children.