With the advent of so many payment systems making payments has become very easy and smooth.
The use of cash is virtually getting extinct. There are the stories of people who have managed with almost no cash during covid lockdown or even during demonetisation.
But with all the ease of doing transactions through digital mode, the risk of unconscious spending is on the rise. Making payments has not only become effortless but also sort of pleasurable and this is where I see the problem.
Just imagine the situation- you have got the cash from the ATM and plan to use this cash for the next 15 days. So, you would be very diligent in using this cash so that you don’t have to run to the ATM again soon. Every time you have to make a payment, you would evaluate that expense because you have limited cash available which you want to preserve as long as possible.
So, for every payment especially if it is non-essential, you feel a certain pain of payment. Every useless expense looks as if someone is robbing you. Thus, your expense would not go haywire.
Now come to present times- You don’t need any effort to arrange your purchasing power. All you need is a mobile and a high limit credit card which everyone has and you have the licence to indulge in virtually all the pleasures of the world. As you don’t see the money, you don’t feel the pain of it going out from your bank account or from your credit card. But is this a happy situation for your long-term financial well-being? I don’t think so!
My suggestions-
1) Don’t discard the use of cash especially for non-essential expenditures. Pain of payment is good.
2) You will not feel the pain of payments if you don’t see the money. Use this interesting point to your advantage. Invest through SIPs and your investments would become virtually painless.
3) Sometimes you have to do expenses on certain essential items. Use digital payments for good expenses which you must do for your & family’s overall well-being.
The bottom line- be conscious while spending and use the pain of payment to your advantage.
Manoj Pandey
CFP
