Cash Amnesia
The term "cash amnesia" describes using cash for purchases you don't want to be reminded of later (such as "guilty pleasures and other hard-to-justify purchases"). As opposed to using a credit card, where you'll see the purchases on your statement later.
Researchers at the Stanford Graduate School of Business studied whether people really now use cash in this way by analyzing purchases at the Stanford Bookstore. They concluded that "customers were more likely to pay in cash for harder-to-justify items like stuffed plush mascots and Christmas ornaments."
Makes sense to me. I don't often carry cash in my wallet, but when I do it always feels like I've got free money to spend — because anything I buy with it won't bump up that month's credit card bill.
More info: stanford.edu
Researchers at the Stanford Graduate School of Business studied whether people really now use cash in this way by analyzing purchases at the Stanford Bookstore. They concluded that "customers were more likely to pay in cash for harder-to-justify items like stuffed plush mascots and Christmas ornaments."
Makes sense to me. I don't often carry cash in my wallet, but when I do it always feels like I've got free money to spend — because anything I buy with it won't bump up that month's credit card bill.
More info: stanford.edu
Comments
My theory is that cash is like ice: a big chunk of it ($50s or $100s) stays around a long time, while tiny pieces ($5s and $10s) quickly evaporate without a trace.
When I turned 18, my uncle gave me a $500 bill and told me to put it in my wallet and forget about it; it was for emergency use only. (This was in the days before everybody and anybody took credit cards.) You'd be surprised how many years you can go without having an emergency serious enough to break a $500 bill! (I've since sold it, but I still carry a couple of $100s.)
I hate carrying $1s because it feels like you've got a lot of money in your pocket, but it doesn't add up to anything. In January, 2022, I started putting all my change and $1 bills in a jar when I was getting ready to leave the house. Two months ago, I was able to bundle up five hundred ones. I have nearly as much change (tip: Hobby Lobby sells a 27 oz. glass jar which holds exactly $100 in mixed coins). Caveat: I'm still sort of in the process of moving in/settling down, so I have to run to one store or another nearly every day, generating a lot more small cash transactions than normal (it just feels wrong to use a credit or debit card for things less than $10).
One great thing about cash is it's so limiting. If I'm going to an event or doing a mini road trip, I leave my cards at home. Yes, it sometimes means not getting a few little extras here and there, but it also prevents winding up with $387.49 in credit card bills because it seemed like a great idea at the time to pay for someone to get a tattoo or buy a bunch of fireworks which are illegal in your home state (you had to be there).
When I turned 18, my uncle gave me a $500 bill and told me to put it in my wallet and forget about it; it was for emergency use only. (This was in the days before everybody and anybody took credit cards.) You'd be surprised how many years you can go without having an emergency serious enough to break a $500 bill! (I've since sold it, but I still carry a couple of $100s.)
I hate carrying $1s because it feels like you've got a lot of money in your pocket, but it doesn't add up to anything. In January, 2022, I started putting all my change and $1 bills in a jar when I was getting ready to leave the house. Two months ago, I was able to bundle up five hundred ones. I have nearly as much change (tip: Hobby Lobby sells a 27 oz. glass jar which holds exactly $100 in mixed coins). Caveat: I'm still sort of in the process of moving in/settling down, so I have to run to one store or another nearly every day, generating a lot more small cash transactions than normal (it just feels wrong to use a credit or debit card for things less than $10).
One great thing about cash is it's so limiting. If I'm going to an event or doing a mini road trip, I leave my cards at home. Yes, it sometimes means not getting a few little extras here and there, but it also prevents winding up with $387.49 in credit card bills because it seemed like a great idea at the time to pay for someone to get a tattoo or buy a bunch of fireworks which are illegal in your home state (you had to be there).
Posted by Phideaux on 08/06/23 at 12:44 PM
I haven´t had any actual cash for 5 - 6 years now. Credit card to fill up the car and everything else is either debit card or telephone transfer.
Posted by F.U.D in Stockholm on 08/07/23 at 03:28 AM
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Category: Money | Psychology