We’re now living in a cashless society which is great for most purposes. You don’t have wads of cash or loose change bulking up your wallet.
Not carrying cash around has reduced the risk of losing it, leaving it behind when you need it or being physically robbed for it. On the other hand, cash is still king for many trades like plumbers, builders, hairdressers, and handymen. I have seen many market stalls still opting for cash only to buy their goods.
Removing this element means we’ve gone semi-digital and now have debit cards, credit cards and contactless payment devices. Managing money becomes easier for individuals and businesses. There is no need to store, protect, withdraw, or deposit physical money. International travel also becomes more convenient without the hassle of exchanging paper currencies.
“This all sounds great but with anything new comes a set of new challenges.”
In this case, the challenge is the risk of detachment from your money and an increase in bad spending habits. Without the physical element of giving away cash to receive a good or service, we don’t feel we’ve exchanged anything in order to gain.
You can easily get carried away with spending, by tapping away your contactless card while shopping, Apple Pay away your Costa Coffee and one-click purchasing on Amazon.
Mix all that with monthly direct debits, credit card charges, subscriptions and other monthly expenses and you might lose track of what’s truly in your digital wallet.
A cashless society relies heavily on technology. System outages, hacking incidents, or power failures could disrupt access to funds. Elderly individuals, rural communities with poor connectivity, and those with low income or debt may struggle to adapt.
“The solution is to go back to basics but also include the digital elements.”
Ok maybe don’t always carry cash around but have a budget and a separate bank account with a separate debit card for everyday spending. Enable transaction alerts on your banking apps. Receive notifications for every purchase, ensuring you stay informed about your spending habits.
Having a clear division in what you expect to go out every month and what money you’ve got left should reduce or eliminate any bad spending habits. You can also try the traditional envelope system, where you allocate cash to different spending categories, it may not work as well in a cashless society. However, you can adapt it by creating virtual envelopes within budgeting apps or using our budgeting planner. Assign specific amounts to categories like groceries, eating out, and entertainment.
As our world becomes increasingly cashless, adapting our budgeting strategies is essential. Embrace digital tools, stay vigilant, and create a virtual envelope system. Remember, the goal remains the same: managing your money effectively, even in this new digital world.
