“Can swapping contactless payments for cash really help control my spending?”

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Studies have long suggested that spending in cash can make you more considered with money. Stylist puts the theory to the test. 

In Stylist’s new digital series In the Red, we investigate how debt is really impacting young women in 2022 – from our connection with credit cards and shopping to examining how debt informs our relationships, our beauty regimes and the way we operate in the world. 

When was the last time you bought something in cash? 

It’s probably been a while since you hunted for change in your purse or passed a £20 note across a till. 

As our busy modern lives have become faster and more hectic, our payment options have evolved to slot into the hustle and bustle so that paying for everyday items can be done almost instantaneously with a glance at our mobile phone screen or the press of a thumbprint.

In fact, cash payments are in severe decline. Only 17% of payments are now made with notes and coins, according to a report by Royal Society of Arts (RSA). This change – which has coincided with the rise of services like Monzo, PayPal and Apple Pay; cryptocurrencies such as Bitcoin; and the continued closure of physical bank branches – has led many to predict that cash will eventually fade into obscurity.  

But even though for most of us its presence has diminished, cash is still vitally important. There are over 70 billion pounds worth of notes in circulation and for an estimated 15 million people, cash is an essential budgeting tool, especially as the cost of living begins to bite.

There’s also plenty of research that suggests using cash makes us spend less. A study published in the Journal of Consumer Research found that spending physical cash – handing over your money and watching it disappear before your eyes – feels especially painful. It found that when subjects were given free cash and invited to spend it they did so far more cautiously than when they were given credit vouchers.  

There’s lots of research to suggest that using cash makes us spend less.

As such, many finance professionals suggest going back to cash occasionally because it makes us pause when it comes to spending in an era when everything we want is just a touch of plastic away.

In an effort to see whether paying with cash can actually transform our spending habits, Stylist challenged two seasoned contactless spenders with using only cash for two days. Here’s how they got on.  

“I was confronted by how much I rely on contactless payments” 

Lauren Geall didn’t think the cash challenge helped her finances.

Lauren Geall, 25, Stylist’s digital writer, rarely spends cash unless she’s been given money for Christmas or her birthday from her family.

Day One

I’d never realised quite how often I use my card until I agreed to this challenge. Almost as soon as I stepped out my front door, I was confronted by the reality of how much I rely on contactless payments – I had to walk to the station because I couldn’t catch the bus (they don’t accept cash), and I had to buy a paper ticket for the tube (which, I was surprised to learn, cost double the amount of my usual fare).

Having a set amount of money in my pocket did make me more aware of what I was spending at lunch, but as the day continued, I found myself spending the change I had left on smaller purchases I wouldn’t usually indulge in, such as an extra coffee. I think the fact that it wasn’t attached to my bank account made me feel as if I wasn’t ‘really’ spending.

Day One Breakdown

  • Tube ticket: £12.60
  • Breakfast: £2.40
  • Lunch: £6.40
  • Coffee: £3.25
  • After-work drink: £4.80

Total: £29.45

Day Two

After begrudgingly paying for another exorbitantly priced Tube ticket (I’m still bitter about this), I manage to get to the office without stopping to spend any of my change on a coffee or mid-morning snack from the perfectly positioned Pret on the road outside.

However, I go back to my old ways at lunch, and end up picking up a load of snacks with my spare change despite the fact that I actually brought a packed lunch with me. Inevitably, some of my packed food gets leftover in favour of my extra snacks – and while I don’t spend any more for the rest of the day, I have very little left when I get home.

Day Two Breakdown

  • Tube ticket: £12.60
  • Lunch: £8.20

Total: £20.80 

The Verdict

While the sheer effort of paying for things with cash did discourage me from ‘popping in’ to the odd shop, I don’t think this challenge ended up helping my finances much at all.

I thought paying with cash would make me more aware of what I was doing with my money, but because I didn’t have a digital record of what and where I’d been spending, I actually found it harder to remember where my money had gone at the end of the day – something that would become a problem if I was trying to budget long-term.

That being said, however, only allowing myself to take a certain amount of money when I left the house did stop me from going overboard – and gave me a sense of freedom with the money I did have. 

“It’s made me pause and think twice about spending money”

Alex Sims found the cash challenge made her more considered about her spending.

Alex Sims, 29, Stylist’s digital commissioning editor, hasn’t used cash for at least two years.

Day One

It has been so long since I last held any cash in my hands that I struggle to remember my PIN number as I get money out from the cash machine for this challenge. I take out £20, which turns out to be a wild underestimate for what I’ll go on to spend in a day.

My first hurdle comes when I try to get the train to work. Fumbling around in your purse for notes at a ticket machine at rush hour is a great way to annoy everyone in your near vicinity. It also costs far more than I realised. Immediately I spend £8.50 of my £20.

I’m also surprised by how much I spend on food during the day. After paying for my morning coffee and lunch I’m left with just £1.50 of the money I allocated for the day. It means I’m back at the cash machine withdrawing another £20 so I can join my colleagues for post-work drinks at the pub.  

Day One Breakdown

  • Train ticket: £8.50
  • Coffee: £2.50
  • Lunch: £7.50
  • Pub: £14

Total: £32.50

Day Two

After being shocked at the reality of just how much I spend each day, I start the second day of the challenge with a view of being more careful about my spending. 

I draw out £10 from the cash machine to cover my train ticket and then carefully organise what change I have leftover from the day before to buy lunch and a coffee.

It’s a sunny day so I decide to walk into central London on my way home from work. On the way, I pass Whistles and see a pair of trousers I’ve had my eye on for a while. I go in and try them on, but the thought of having to go to a cash machine and draw out £80 to buy them makes me think twice. I leave them and head home.

Day Two Breakdown

  • Train ticket: £8.50
  • Coffee: £2.50
  • Lunch: £6

Total: £17 

The verdict

Paying with cash has been so illuminating. I’ve realised there are so many everyday expenditures I don’t really register when I pay for them on my phone – like taking the train or buying my morning coffee.

There are so many times when I’ve looked at my bank balance at the end of the month and wondered, “Where has all my money gone?”, and after paying in cash it’s easy to see how little payments can really add up and leave my current account in a sorry state.

It’s also really made me pause and think twice about spending money when usually it’s all too easy to swipe my phone absentmindedly. Having days where I pay solely with cash is something I’ll try and do more in the future. Hopefully, it will help me be a more considered spender.  

Images: Getty; Lauren Geall; Alex Sims

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