There’s nothing lonelier than a single bill pining away in your wallet … unless, of course, that bill happens to have Sir Robert Laird Borden’s face on it, which means you’ve got 100 bucks cooling its heels, waiting to be spent.
But let’s assume it is Sir Wilfrid Laurier — a fiver, in case you didn’t know — who is keeping receipts company in your purse or wallet. When you hove into sight of a java joint and pull out the Great Conciliator — yes, this column is a history lesson as well as a money lesson — you are likely to think twice about using it all up.
Cash controls spending, plain and simple. Using cash to pay for everyday purchases such as coffee, transit, lunch and magazines alerts you to the idea that you’re actually spending real money. You just don’t get the same cautionary sense when you haul out plastic, be it a debit card or a credit card.
There’s a distinct cognitive event that happens when you handle money. It’s called awareness. Over the counter goes the fiver and back comes a loonie, a dime, two nickels and four pennies. You drop the pennies in the “Give a Penny Take a Penny” bowl and pocket the rest.
I’m betting that everyone reading this column has just added up the change. Some of you have added up the change and then subtracted the four pennies to determine how much money was left from the purchase. And a few of you are calculating, even as you read, what that purchase might have been by the amount spent.
Was it a frap, cap, latte, green tea and cookie? You see, you are much more conscious of this imaginary purchase than if you had paid with plastic. Now, add in the awareness of the bills left in your wallet and you become attuned to your temporary wealth, or lack of it. At the end of the day, what encourages us or cautions us about spending is knowing where you’re at and using cash will do it every time.
Alison’s Money Rule:
Cash controls spending. Using cash to pay for everyday purchases alerts you to the idea that you’re actually spending real money.
• For more about Alison’s show Maxed Out, and for local times, visit www.wnetwork.com.
– Alison Griffiths is a financial journalist, author and host of Maxed Out on the W Network. Write to her at email@example.com.