Why do you feel bad about spending cash, but not about making online payments?

[Samlucky O]

Have you noticed one thing?
As bad as it feels when you take out cash or paper notes from your pocket, sending three times more money than you do with a card or digital payment does not feel as bad. In both cases, your money is going. So why doesn't our brain treat both expenses the same way?

i dont know how people feel about physical cash and online payment, to me they are the same, although some may see spending online as fast spending habit compared to when they spend physical cash. i see that those that feels its too heavy spending physical cash allowed their brain to assimilate that, whatever we make the brain think, it interpret it exactly the way we expect and we feel we are not doing it right. if you dont allow your brain to think like that, you will still be fine spending physical cash and online payment without feeling the bad.

[Fortify]

Have you noticed one thing?
As bad as it feels when you take out cash or paper notes from your pocket, sending three times more money than you do with a card or digital payment does not feel as bad. In both cases, your money is going. So why doesn't our brain treat both expenses the same way?

Psychologists have found that when you take out cash from your hand, the brain treats it like a physical loss. This is why people used to count the cash they had in hand when going to the market earlier. Because taking out each paper note was visibly painful. But digital payment has changed the entire system. There is no physical friction here, no paper notes are changing hands. Just one tap, one OTP, and Done. And the interesting thing is that when the pain of payment decreases, the control of spending also decreases.

A study by MIT has shown that when people use cards and digital payments instead of cash, their tendency to buy unnecessary things increases by 20%-30%. Because the brain cannot fully feel that money as a loss. And that is why spending often goes unnoticed in today's digital economy. Subscriptions are running, auto-renewal is running, one small payment after another is being deducted from your account, but it does not bother or pain you. That is why people spend large amounts of fake money in the fun game of getting rich. Because the brain does not consider them real. Digital spending is much like that. Because if you notice, many apps or sites these days avoid the word money or dollar, so that you do not feel uncomfortable, somewhere it is written 'coin', somewhere it is written 'points', and somewhere it is written 'reward credits'. The reason for this is that the system does not want your shopping to stop. So it changes the word in various ways to give different rewards,  They try to keep you busy with gifts, vouchers. Because the less you think, the more you spend.

It's an interesting phenomenon and good to see thoughts backed up by science as it's a "trick" that has long been shared by financial experts, who tell you to withdraw your budget at payday if you are struggling for money because dividing it physically can help you track the spend. There is a lot of junk and heavy marketing out there which are all trying hard to take our money. Another "trick" you can use if you want to buy a product - just sleep one night on it - if you still think it is necessary the next day then buy it, but many times it will not be. Even as you get richer may it is a good idea, because people get far too comfortable with sticking everything on credit cards without any thought.

[7juju]

Well everyone will speak based on their personal experiences. I don’t like cash because if I keep cash with me I spend it easily I don’t feel pain rather I derive joy. But if I don’t have cash my money stay longer with me. I even feel more pain spending money electronically than when I do with cash, because getting those debit alerts and checking my transactions history in my mobile apps annoys me. If I spend cash I forget about it immediately as I don’t have anything that will remind me of those money I spent. I guess I’m not affected by this study.

[Coyster]

Money is money, at least that is how i see it and i treat all of it in the same way. I don't connect to numerous subscriptions just because i get debited online, that is a foolish thing to do and a quick way to go broke.

I do not agree with the content of the OP. Many parts of the world are already operating an almost cashless economy, so people do most of their spending through online sources rather than cash. It does not mean cash is valued more, online payment systems are simply more convenient and safer, you wouldn't carry $50k cash with you every day, would you.

[Zlantann]

Well everyone will speak based on their personal experiences. I don’t like cash because if I keep cash with me I spend it easily I don’t feel pain rather I derive joy. But if I don’t have cash my money stay longer with me. I even feel more pain spending money electronically than when I do with cash, because getting those debit alerts and checking my transaction history in my mobile apps annoys me. If I spend cash I forget about it immediately as I don’t have anything that will remind me of the money I spent. I guess I’m not affected by this study.

My own problem is that I can easily give out money to people in need when I have cash. When it comes to helping people in need, I sometimes lose my financial restrictions. But I am trying to have control because people might be taking advantage of generous people. This is why I don't always like having so much cash on me.

Nevertheless, I don't spend on things I don't need just because I have cash on me. Always having the consciousness that spending recklessly will lead to financial problems keeps me in check. Online banking has an advantage because you would they will always show you your balance after spending. This will always remind you of what you have left.

[Halifat]

Well everyone will speak based on their personal experiences. I don’t like cash because if I keep cash with me I spend it easily I don’t feel pain rather I derive joy. But if I don’t have cash my money stay longer with me. I even feel more pain spending money electronically than when I do with cash, because getting those debit alerts and checking my transactions history in my mobile apps annoys me. If I spend cash I forget about it immediately as I don’t have anything that will remind me of those money I spent. I guess I’m not affected by this study.

Everyone have their own opinion on how to deal with cash at hand and cash at bank, as I am concerned I prefer to make transfer because it help me spend easily than holding a cash, based on my own experience if I have cash at hand honestly I found it very difficult to spend because it will be too heavy for me to take it that is why I don't like to have cash with me unless I am planning a savings and with that I usually succeed. The money that I will spend and forget easily is the money from my bank account, because I've tried it, which I also notice it anytime it comes to transferring money I don't feel anything even though it is very huge.

[tygeade]

Credit card has been talked in tune with this. When people spend on their credit card, it's money that does not exist, you are going to pay it later, and not even have to pay 100% of it all at once. So people have this weird mental psychological thing where they think they are richer than they think they are.

If you are making lets say 2k dollars a month, but spend 2.3k a month, but they ask you to pay 1.7k back, you think that you are left with 300 dollars after you spent 2.3k, do not see the debt that is left, and think that you spent less than you actually think or you are richer than you already are. This causes a lot of trouble for many people to calculate their future, and one day this bites them back again when they have to pay.

[Unknown Op]

It is true that when we spend money in the form of cash we feel like we lost the real money but when we when we pay through online payment methods it doesn't feel that pain , digital payments is removing that friction and tricking our brain to spend more and more money freely without thinking for a second. This online payment method technology is designed in a way that is not making us feel like we are wasting our money on online things. We have to be more intentional or otherwise we will be falling for these online traps without even realizing it.

[LGD2Business]

This is true because when you have cash in your hand you hesitate to spend it, but when you see numbers on a screen you feel more at ease. Everyone has experienced this. This is perhaps one of the biggest advantages of using cash. You have a better sense of the value of money.
Sometimes I make unnecessary purchases without even realizing it. Money is on the verge of going completely digital and that's why people are struggling to keep track of their finances. Many people I know have credit or credit card debt. There's hardly anyone left without debt.

[abhiseshakana]

In my experiences and always, when i have cash money it just runs out quickly, so i prefer withdrawal cash in small amount. I save more when the money is in the account. What i see nowday, many online marketplaces are racing to simplify payments by providing a variety of alternatives, including QRIS, digital wallets, bank transfers, virtual accounts and pay inconvenience stores. I only see one purpose why this convenience exists, to eliminate pauses and barriers for consumer thinking, without friction greater probability of successful transactions or the less time people spend thinking, the more likely they are to buy. This is my wife experiences to avoid over spending or useless online shopping, put everything she want in shopping basket, waiting at least 24 hour or sometimes discuss with me first before purchase, she also separating spending and saving account and put daily limit on spending account. What she need are to restore the pauses in thinking that technology has eliminated.

[Peanutswar]

I guess im a quite feel guilty on this, this is the reason why I do have a lot of credit cards and next day is wondering why I ended up losing all of my money in an instant. When using a cash of course you have seen the number of money counts and you can touch and feel afterwards of spending is its visible to you that you have a smaller number of cash that you used to withdrawn, now you will guilt with your spending habit. Now with the use of online payments is you aren't seeing actually the money itself instead the use of convenience you can now spent your money without seeing it reason why people can easily bind and spent as much as they want because they are just seeing numbers and not seeing a physical money.

Right now, I do limit number of online and credit card transaction because its increases my lifestyle too much and it's not healthy anymore.

[yhiaali3]

I have noticed that indeed. I always treat my electronic payments as if I am not paying anything at all, while I feel very annoyed when I pay in cash, even though most of the time electronic payments are much larger than those I pay in cash.

I even noticed, for example, that I get annoyed when my children ask me for cash to buy necessities for them, while when they ask me to buy unnecessary things online I pay easily without annoyance even though the amount is sometimes double. Most likely we feel that money online is virtual money and not real.

[imthegreat]

I think my answer is "no, online spending is no different from physical spending," and I'll explain why it's so personal for me. Yes, at first glance, all online expenses are invisible, because they only reduce the balance on the card, and you won't even always get a push from the bank about debiting funds. A small deal with conscience about an impulsive purchase and that's it, you have it in your hands, and with a reduced balance on the deposit, "we'll figure it out later." But as for me, I record all purchases in the app and every expense of money, whether it's the physical return of banknotes or just debiting money from a card - I record everything, and not a single expense goes unnoticed.

[Leahized]

Have you noticed one thing?
As bad as it feels when you take out cash or paper notes from your pocket, sending three times more money than you do with a card or digital payment does not feel as bad. In both cases, your money is going. So why doesn't our brain treat both expenses the same way?

It is not the same for everyone. Many are comfortable using cash and many are comfortable using online money. I usually don't take such distinctions too seriously. Because I usually use cash to buy daily necessities. Digital payments have many advantages, usually discounts are available for multiple payments. But if we consider the current times, most of the digital payments are available everywhere and payments can be made without any problem. And for this maybe many people feel transparent to make digital payment than cash. But most of the time I make digital payments which can be done in a very short time.

[Coyster]

Most likely we feel that money online is virtual money and not real.

I am surprised to hear that, so you go on spending sprees when you spend through online means because you feel the money is not real, lol. That is very funny to me and i would advise that you withdraw all your money and bury the cash behind your house, so you can start spending more responsibly.

I don't really understand what some of you are saying. You spend online, you get debited, you can see your balance and what you have left, yet it does not feel real. Does it feel real when it reads $0?

[Die_empty]

Most likely we feel that money online is virtual money and not real.

I am surprised to hear that, so you go on spending sprees when you spend through online means because you feel the money is not real, lol. That is very funny to me and i would advise that you withdraw all your money and bury the cash behind your house, so you can start spending more responsibly.

I don't really understand what some of you are saying. You spend online, you get debited, you can see your balance and what you have left, yet it does not feel real. Does it feel real when it reads $0?

Maybe the reality of thinking that online money is not real will set in when he becomes indebted. In some societies,, cash is rarely used, so it doesn't make sense that people see it as unreal.

Since online banking shows the balance each time a transaction is made, it puts users under check. It is not like cash which you might not have the patint to coin how much is remaining after spending.

Spending responsibly is not a function of the means of payments. A prudent spender will always soend responsibly regardless if it is online or physical fiat.

[Roseline492]

My own problem is that I can easily give out money to people in need when I have cash. When it comes to helping people in need, I sometimes lose my financial restrictions. But I am trying to have control because people might be taking advantage of generous people. This is why I don't always like having so much cash on me.

This is also part of me because a lot of times I comply when someone is begin me money for food or snacks, especially if I no that they're begin me because they are incapacitated to work for the money they would feed, but however the unexpected thing I saw about this is that, it was becoming too consistent and sometimes I compromise the cash I wanted to use for other things and give them but it was too much, so actually because of this scenarios we could actually see that we spend more cash even when we do not planned for it but however in digital you could easily skipped a lot of spending because if they beg you and you don't have cash your conscience will not blame you for anything because you wouldn't make transfer whenever you are beg for money, so actually that's the significant between the unplanned usage of cash and digital.

[bakasabo]

Most likely we feel that money online is virtual money and not real.

I am surprised to hear that, so you go on spending sprees when you spend through online means because you feel the money is not real, lol. That is very funny to me and i would advise that you withdraw all your money and bury the cash behind your house, so you can start spending more responsibly.

I don't really understand what some of you are saying. You spend online, you get debited, you can see your balance and what you have left, yet it does not feel real. Does it feel real when it reads $0?

This is not surprising at all. Digital money that we have, we cant feel physically. It tricks our brain. It is kind of spending what you dont have, which might feel like not spending at all. What is it easier to part with, with apple in hand or with picture of apple that you can send? I also find it easier to spend online, than parting with fiat, as I am hesitating sometimes if I really need that thing? But globally, for me there is no big gap between spending digital or cash money.

[Coyster]

This is not surprising at all. Digital money that we have, we cant feel physically. It tricks our brain. It is kind of spending what you dont have, which might feel like not spending at all.

It tricks your brain? Certainly not mine my friend. Are you aware that in many countries people rarely use cash anymore, so everyone who live in such places are spending money like crazy because "it's not real", c'mon man.

What is it easier to part with, with apple in hand or with picture of apple that you can send?

This analogy does not fit in this discussion. We are talking about money that is fungible, what fungibility here means is that $70 in your bank can be interchanged/exchanged for $70 cash.

[yhiaali3]

Most likely we feel that money online is virtual money and not real.

I am surprised to hear that, so you go on spending sprees when you spend through online means because you feel the money is not real, lol. That is very funny to me and i would advise that you withdraw all your money and bury the cash behind your house, so you can start spending more responsibly.

I don't really understand what some of you are saying. You spend online, you get debited, you can see your balance and what you have left, yet it does not feel real. Does it feel real when it reads $0?

Maybe the reality of thinking that online money is not real will set in when he becomes indebted. In some societies,, cash is rarely used, so it doesn't make sense that people see it as unreal.

Since online banking shows the balance each time a transaction is made, it puts users under check. It is not like cash which you might not have the patint to coin how much is remaining after spending.

Spending responsibly is not a function of the means of payments. A prudent spender will always soend responsibly regardless if it is online or physical fiat.

It's not surprising; it's simply a psychological phenomenon. It doesn't mean I'm spending irresponsibly or going into debt because of it. It's simply that you don't experience the same feeling you get when you pay a large sum of cash. I'm not the only one who says this; many others have said they feel the same way, and scientific studies confirm it.

In my country here, we still mainly use cash and only use electronic payment for some services, so perhaps we don't feel that we spend a lot.