No one enjoys spending money, but everyone likes buying things. It’s the tender balance often shaken by necessity and irresistible bargains that our savings accounts nervously rest upon. Only a few years ago, it was common practise to physically exchange one tangible object for another (cash for a product purchased), but then came Paywave, where we don’t even have to enter our pin numbers to initiate the transactions, a small number on the screen beneath our credit or debit cards reluctantly reminding us we were still giving up money.
Swoosh has gathered a few reasons you might not be aware of why ‘tapping’ is actually costing you more.
Out of sight, out of mind
Think about the last time you spent a substantial amount of money. Perhaps it was a comprehensive grocery shop or a glamourous new outfit. Imagine actually diving into your wallet and extracting every single dollar to pay for it, whether it be $100, $200 or more. And then remember how it felt to use Paywave. Two very different emotional reactions to one very basic transaction.
With the introduction of ‘tap-and-go’ payment methods, people of all ages are finding it far easier to continue with large or a series of small, frequent purchases, as they are not physically aware of the money leaving their possession. A one-off $4.50 ‘tap-and-go’ payment for a cup of coffee doesn’t seem like much, but to repeat that thinking every day, seven days a week, 52 weeks a year, can end up costing someone thousands. This added feature of convenience has come at the cost of our sense of rational spending, in which our long-term future isn’t taken into consideration.
Why the financial institutions encourage ‘tap-and-go’
With less cash being circulated between businesses and consumers, a significant decrease in ATM withdrawals and cheque usage has been a result, meaning less bank charges incurred to the public. So why would financial institutions actually support a cashless economy? Simply because cash costs more money than it makes.
Though most of us manage our money through online banking, if cash exists, banks must still be capable to accommodate their customers who ask for it. This then hikes up costs for banks and other financial institutions to transport and store the cash in numerous location, not to mention the extensive security measures undertaken to protect it. After all, it is quite possible (and common) for scammers to steal money digitally, however in order for thieves to steal physical cash, there is often some degree of violence involved, putting the institutions’ customers and employees perpetually at risk. At the sake of losing profits from ATM charges, they would happily do away with cash transactions.
Measures to keep your money
If losing sight of your payments is the problem, then re-establishing a sense of awareness and control has to be the answer.
Begin by reacquainting yourself with cash. Find the nearest ATM that doesn’t charge exorbitant bank fees and withdraw a wad of cash. Whether it be just for a night out, a day of shopping, or a whole week’s worth of sundry expenses, it doesn’t matter. Once you start to see that amount dwindling, you will be more conscious of its value and reassess a purchase’s necessity.
Also, find a bank that allows you to set up sub-accounts to your main one, so you can create a stream from the one where you get paid and allocate money to say a ‘Bills and Rent’ account. This will not only take away money from your spending account so you can’t use it, but also cover your essentials should you completely lose track.
Paywave has two not so distant cousins named ‘Subscriptions’ and ‘Memberships’ that you may have forgotten about. This is what companies are counting on. They aren’t too fussed if you’re reading their articles or attending their gym, as long as those monthly fees are coming in on time. It’s time to filter through your life and see if you are really getting the most out of your money. If you aren’t, be brave, make the chop, and end those pesky expenses.
Need help structuring your finances?
If you find yourself having spent your way into financial uncertainty, there’s no need to panic. Swoosh has the solutions for you. We offer simple access to fixed term loans with scheduled repayments that can be easily integrated into your weekly budget, and get you back on track to saving for a more secure future.