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

[Cryptomultiplier]

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.

One truth we should not fail to realize is that, convenience many times than not, leads to how we feel the impulse to make some spending decisions as in this case of how one feels about spending cash or digital currency.
Different control tricks can be used to know how to manage our expenses both in physical form or digital form and at the core of this trick lies the discipline of bankroll management.

[AgriTrack]

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.

I usually feel good with online payments as it give me convenience and privacy both. Currency in my wallet always create problem for me. Every time when I used to hangout with my friends they try to give me penalities in terms of parties or some ask for loans. My younger brother demand pocket money . Whenever I refused all these for money they check my wallet. online accounts solve my all these problems. It is secure with my few digit numbers and no one knows how much amount I have in my account. Online payments help me in increasing my saving ratio. As due to confidential account it saves me from lot of pressures. now I prefer this one click payment system rather carrying wallet in my pocket

[uneng]

The same goes with owning paper money, instead of digital cash. It's much more exciting to have 1000$ in cash than 1000$ on your banking app. We are still used to value the physical much more the digital. The sensations are more intense towards objects which exist in physical reality.

And since we moving into an era where the tendency of everything is to become more digital, I think sensations are going to decrease in intensity. Actually, we already observe it nowadays in society. People are much more apathetic than before adoption of smartphones and wide internet access. At same time there are more stimuli and anxiety, the satisfaction is much lower, proportionally speaking.

[Synchronice]

To my mind, this is the psychology of why spending cash is harder than paying with card (I won't talk about online payments exclusively since they are also paid via card).
When you see that you have 100 Euro bill in the pocket, you realize that once you pay 70 Euro, you'll be left with 30 euro and it doesn't look nice or psychologically good. When you pay with card, the process is simple, you tap the card on the terminal and that's it, you don't see the number, your card still stays the same visually, you don't touch the cash, so it feels like you are putting something on the terminal and that's enough to get what you want. We rarely check our online bank account too and credit cards make this process even more financially worse for us.

[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?

This feels like good advice when you have a limited amount of money to exist on, but for many people who have their finances in order it starts to become a drag and an inconvenience. Using credit cards can actually be very beneficial as long as you don't overspend on them - they give you consumer protections and up to 31 days interest free borrowing as long as you use them wisely. There is the small problem of spending creep which is easy to do, but anyone who keeps a budget should be taking reasonable care to prevent this or at least monitor it before it gets too out of hand. If you don't have much cash available then it's definitely a wise idea to withdraw it and work with physical notes.

[Versatile_choice]

I don't feel bad while spending cash I  don't feel bad making online payment either, since the use of digital currency is not make legal in my country so i make use of the both at the same time because there are some companies I mean stores that doesn't accept digital currency although I have local bank but I decided not to put a huge amount of money in that account due to inflation so what I do is to leave some amount I know it can cover all my expenses for the week/ or months or before my next pay day and then leave the rest in my bitcoin wallet.

[DiMarxist]

Personally speaking I don't see the difference between the two because whether you are spending physical cash or doing online payments. One thing is sure that money is leaving your account so the question we are to ask ourselves is, what is your spending like and is your spending bringing value back to you as a person. Money is not just made to be spent only money is ment to be invested this is one lesson that we should learn this is the difference between the poor and the rich.

[MadSl1m]

OP named the right thing, here's why it works. Prelec and Loewenstein called it "coupling": with cash, paying and buying happen in the same moment, so you feel the loss. With a card the money leaves later or out of sight, so it barely registers. Same reason a prepaid holiday feels free and a credit card feels painless, the paying is split off from the buying.

What's interesting on a Bitcoin forum: crypto flips it. Paying in BTC straight from your stack usually hurts more than fiat, not less, because you're not just spending, you feel like you're selling something you wanted to hold. A crypto card hides that again, it converts at the till, so "spending my bitcoin" turns back into a normal swipe and the hesitation goes. Same friction, removed twice: once by going digital, again by hiding the coin behind the card.

[Obulis]

What a holistic view!
This explains the importance of financial management because with it there will be a level of control about what happens with your digital spending or cash at hand. There is also this joy of using modern facility which supports in reducing "the pain of paying", new digital bank with know packages will for sure attract new customers who will freely spend what have just to feel among what is trending. Looking at the comfort attached to digital payment, it becomes easier for someone to freely spend their money without consideration but that is mostly when there's lack of control or poor financial management.

[junder]

I understand this kind of situation, another thing I think is when someone will spend cash to pay for something sometimes there is still consideration but when buying online there tends to be no consideration made or another case for example someone will buy an item with a price of $100 but he holds it because he feels it is too expensive and the option chosen is to search online and there is the same item with a cheaper price but coupled with the shipping costs the amount of money spent tends to be the same or even more this often happens anyway in my opinion.

[Pablo-wood]

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.

I count cash at hand not because I regret spending them but because I need to know how much I have so I no how to plan my expenses and stay within my means. Spending to me feels the same be it paper or digital cash. To me nothing really changes. Spending discipline is inherent once it's not there one will spend excessively be it in form of paper or digital cash. Personally I see no difference except in cases where people get so addicted to spending without budgets.

[bakasabo]

I think few more years would pass and some people would start regretting that they have been paying in cash instead of paying digital, especially if they are crypto users. Because it is getting more difficult or more expensive to convert crypto in cash/fiat without losing anonymity. I have started to feel that my stocks of cash are slowly running out and I start to have less opportunities to get something "without paying VAT" if we agreed to pay by cash.

[YOSHIE]

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

Every individual has an Emotional Attachment, this trait is felt by almost all humans, paying cash will trigger emotions directly for us, At that time we will imagine losing and having difficulty finding money, in contrast to online payments our feelings do not have a physical/real impact.

Psychologically, this kind of phenomenon is often associated with "pain when paying" where at that time we imagine the sensation of losing the money we have so that our brain does not accept it. So it's different paying physically from online.

[Mame89]

Yes, what you're saying is very true in my life and I think many people feel the same way. When using digital payments we feel pain and discomfort when spending money. This is because cash has a much stronger psychological effect. It feels real because we can physically see and feel the money leaving our wallets when we make a payment. This makes our brains immediately think of loss clearly.

But when we make digital payments the sense of ownership is lost, so the pain of paying becomes less intense. The consequences vary and some people even tend to be more wasteful when using digital payments. This is because paying digitally makes transactions feel like a game or just numbers, rather than losing something tangible. This often happens to me when gambling especially after winning. The money in my gambling account seems worthless, making it easy to spend it again even though withdrawing it to cash seems quite valuable.

[MRY]

Yes, what you're saying is very true in my life and I think many people feel the same way. When using digital payments we feel pain and discomfort when spending money. This is because cash has a much stronger psychological effect. It feels real because we can physically see and feel the money leaving our wallets when we make a payment. This makes our brains immediately think of loss clearly.

But when we make digital payments the sense of ownership is lost, so the pain of paying becomes less intense. The consequences vary and some people even tend to be more wasteful when using digital payments. This is because paying digitally makes transactions feel like a game or just numbers, rather than losing something tangible. This often happens to me when gambling especially after winning. The money in my gambling account seems worthless, making it easy to spend it again even though withdrawing it to cash seems quite valuable.

It is true that cash has great psychological power for humans. The digital money that manifests itself solely in the form of numbers can easily cause people to lose their identities. I believe that it is absolutely natural to be disposed to think money is precious as far as gambling. It is also good to cash out your prize as soon as you win so that you will not lose it.

But not only about gambling but the economy which may be hazardous in preserving too much money. The risk here is that with an extreme inflation levels, you will have no money of any value regardless of the quantity of money you may have.

[batang_bitcoin]

What's interesting on a Bitcoin forum: crypto flips it. Paying in BTC straight from your stack usually hurts more than fiat, not less, because you're not just spending, you feel like you're selling something you wanted to hold. A crypto card hides that again, it converts at the till, so "spending my bitcoin" turns back into a normal swipe and the hesitation goes. Same friction, removed twice: once by going digital, again by hiding the coin behind the card.

That is a fact right there. When we use btc in spending or purchasing even with the things that we need. We totally feel that a portion of us have been removed and it's probably the same with the gold investors who has sold it for something even in profit if they're a long term investor of it. It's because that the appreciation value of it. We know that there's a big potential that the value of what we hold will grow in the future even though it's hard to accept the fact that the price might be higher in the next couple of weeks, months and so on.

[Royal Cap]

For me there is no difference between cash and digital payment. Because no matter how I spend my hard earned money, I feel the same way when I spend it. For me money is money whether it is in notes or as numbers on a screen. But it varies from person to person, If you have a habit of following a budget from the beginning, then even if you change the payment method, your spending habit will not change much. And yes the issue of subscription and auto renewal is really important. Since the amount is small, many times we do not notice how much money is going away.

[Glowy]

It does matter who says what because I feel the loss when I spend. It is both same for me, funds leave my hands or my account the figures drops and that has some degree of impact on me.

[programmer3666]

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?

Let me explain.
There is an interesting explanation for this in behavioral economics, it is called "The pain of paying".
 https://cir.nii.ac.jp/crid/1360011146037792896
https://www.ovid.com/journals/mlett/abstract/00125025-200112010-00001~always-leave-home-without-it-a-further-investigation-of-the

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.
And the biggest companies in today's world don't just want your money, they want your attention, your small weak moments of self-control. And the most dangerous thing is that when people don't feel the pain of something, the consequences of that thing also seem less real. So it's important to learn to recognize this magical trap of technology. And it's also important to ask yourself, 'Do I really need this' or is the system showing me the illusion of need? 'Am I really buying', or is it being bought by me? If you can catch the difference between these two, your entire financial life can change. Keep one thing in mind, the most dangerous spending is not the one that hurts you. Rather, the most dangerous spending is the one that you don't feel.

The danger associate in digital economy is the silent bleeding of automatic subscriptions that happens monthly. When you simply just sign up for a streaming service or even like an app trial or a digital package, in your innocent mind all you thought of at the point of first sign up or trial was the small fee at that exact moment but in due time the auto renewal will start every single month without seeking your permission and it can become completely invisible because you will never assume that you will have to open your wallet to make the payment, so it can skip the brain and you forget that your account is consistently leaking some cash at the background.

[lombok]

The danger associate in digital economy is the silent bleeding of automatic subscriptions that happens monthly. When you simply just sign up for a streaming service or even like an app trial or a digital package, in your innocent mind all you thought of at the point of first sign up or trial was the small fee at that exact moment but in due time the auto renewal will start every single month without seeking your permission and it can become completely invisible because you will never assume that you will have to open your wallet to make the payment, so it can skip the brain and you forget that your account is consistently leaking some cash at the background.

Indeed, the simplicity of electronic transactions conceals the process of leaking finances. Automatic payments for monthly utility bill remain unnoticed, especially if the first payment amount is insignificant and does not imply any expense of physical cash at all.

Unintentional forgetting to track expenses can eventually lead to depletion of your saved money. Without constant monitoring of the list of services installed, you may be spending your money in vain in the future.