With an increasing population now familiar with ‘tap and pay’, the value of money and ability to make tempered financial decisions can sometimes become lost.
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’.
Remember, your children’s financial attitudes and behaviours can be inherently tied to the decisions you make regarding your personal finances.
*Raghubir & Srivastava. (2008). Monopoly Money: The Effect of Payment Coupling and Form on Spending Behavior. Journal of Experimental Psychology: Applied, 14(3), 213-225.