Cash Offers an Escape from the Overconsumption Cycle
Dec 6, 2024
At a time when social media is ‘trapping us in a never-ending cycle of overconsumption’ the analogue simplicity of cash is helping people hold themselves accountable for their purchases, take control of their finances, and begin building emergency funds or savings.
New Delhi TV columnist Anwiti Singh blames the rise of instant, digital payments—such as India’s popular Unified Payments Interface—for making it easier than ever to chase the dopamine high of making purchases, to the detriment of one’s bank account and financial stability. She says: ‘the convenient of UPI, credit cards and buy-now-pay-later apps certainly exacerbated my shopaholic tendencies.’
For those who struggle with ‘invisible spending’ and find themselves surprised by extra charges appearing on bank statements each month, Singh says cash spending could be a key part of the solution. The psychology behind handing over a physical manifestation of hard-earned wealth makes people more mindful of what they’re spending and, once this good habit is formed, it may also spill over into cashless purchases.
When I finally took stock of my financial habits, I discovered something crucial about the psychological impact of handling paper money. Counting bills and paying in person makes you more mindful of your spending. A colleague told me how once he decided to re-adopt cash for some expenses, even entering his UPI pin would force him to pause and consider whether that ₹5,000 purchase was truly necessary. It's this moment of reflection that saves us from impulsive purchases.
Singh is not advocating for cash-only spending, but rather saying it can be a valuable tool to stay in touch with personal finances. For example, she recommends limiting spending on shopping trips by carrying a fixed amount of physical money. Once the money is gone, the trip is over, regardless of what has been purchased, helping to limit impulse spending.
When I go to flea markets, I carry a specific amount of cash-say ₹2,000 to ₹2,500-and leave my card at home. I'm now more deliberate about what I choose to purchase. It's reminiscent of my college days when every rupee counted, and budgeting was essential.
Ultimately, Singh says, mindful spending is critical, and using cash can help create and reinforce this habit. ‘While credit and buy-now-pay-later can be useful in emergencies,’ she says, ‘they shouldn’t become part of your shopping routine. Good financial health is necessary to enjoy life’s little pleasures without the burden of regret.’