I set myself a little Mini-Experiment at the start of February, which was to only spend cash and not use my card for a month.
With this in mind, I shuffled my way to a high street branch of a bank and asked for £100 to be withdrawn, in £1 coins. The cashier was surprisingly annoyed by my request (you are asking ME, a cashier, to change some money for YOU?) but did hand over the coinage eventually. After quickly stowing the 5 bags, each with £20 of £1 coins, in my rucksack and walking out into the cool February air a couple of things immediately struck me;
- Just how heavy physical cash is; and
- A strange guilty feeling*
So, with a heavy rucksack and a bizarrely heavy mind I set off on my physical cash adventure, to the hardly conspicuous jingle of coins.
I got home, ran upstairs like an excited school child and burst open the wee bags containing my treasure. No, not crack cocaine, £1 coins. I set out the coins on the desk in our spare room, settling with 10 piles of 10 £1 coins for my display. Over the next 4 weeks I witnessed these piles slowly diminish.
The coins are next to the laptop, the carefully stacked piles of £10 are frustratingly easy to knock over. And which seem to collapse at the slightest tremor.
I was going to keep track of exactly where I spent the money, but it proved harder than I thought.
Spent £27.5, just over the needed run rate to break even for the, admittedly short, month of February. Spent a bit of cash on lunch with my lunchtime gym buddies, some beer for a boardgames night with friends, a piece of timber for my joinery class and even a donation for the privilege to dress down at work.
It’s a different experience seeing physical cash diminish, compared to a more intangible number on an internet banking site.
Left with £53.20 (EDIT: £57.20 actually. A bonus of physical cash is that you can find some stashed in a coat pocket. The other end of this is that you can *GASP* lose physical cash) at the end of week two, reigned back on the ludicrously luxurious spending of the week before.
Went out for coffee and before I knew it I had used my debit card, contactlessly. It really is so fucking easy to unconsciously use your card this way. The spending barely registered.
I have no doubt that this technology is increasing the ease at which money flows about the system at the murky individual consumer level. Good for business, not so good if you are trying to save and/or reduce spending.
One mistake made, but otherwise slowly getting used to this medieval way of spending money. For one, you need a little bit more foresight. You need to plan your spending and then carry cash with with you. No one wants to walk about with a kilo of coins slung over their shoulder in case of ad-hoc expenditure on coffee, cake or death. It’s too heavy. And irritatingly loud to walk with.
Week 3 & 4
Expenses included bowling and a birthday lunch, all paid for with coin. A few over priced drinks in a couple of bars were paid for with small handfuls of metal. A trip to the cinema to see the very funny Deadpool was supported by coinage.
A few people stared as if I were a time traveller or had escaped from some backward rural tribe, but most didn’t care (or at least hid their shock better).
Left with a neat pile of £1 coins, totalling £13 at the end of the experiment.
I’ll admit to failing the challenge slightly and overspending. A back injury eventually ended up with me paying for some physiotherapy using my card. It was unplanned and a little bit last minute, but necessary. It was a shame to resort to using the card for such a substantial amount, but I didn’t want to end the month with the small victory of only using coins but a larger failure of a crooked spine. Overall, the Mini-Experiment was a success.
Spending physical money definitely resulted in a lower spending rate.
Unlike the whole-of-your-bank-account-in-your-pocket power of a bank card, physical cash has limited prowess. The bank card is at the Ford F-150 end of spending power, showy but excessive. It has far more power than we need from day to day, and is probably only actually required a couple of times a year.
Using coins was akin to riding about a 125cc motorbike, slowly sipping from it’s gas tank but with limited hauling power or top speed. You may well reach the limits of it’s power but you’ll still get to your destination.
Bank cards are quicker and easier to use than cash. Not that this is necessarily a bad thing in itself, but if you have little self control you’ll find yourself spending more as a result. It is less psychologically painful to swipe a [credit] card than to physically hand over cash. In relation to credit cards but applicable to normal debit cards too.
Spending hard cash has a direct link with what we buy, we have a feel for how much that transaction costs us. The consumption experience and the payment are said to be coupled with one another due to this more direct link. Indeed, some tests subjects were shown to be willing to spend twice as much on an item with a value unknown to them when using credit versus cash. The link between value and physical cash is that much stronger for us, we do seem to place more value on cash than intangible credit.
Another argument for using physical cash is that people are less likely to use physical cash in a dishonest way, than something that is a step or two removed (but still has value). Maybe that’s why some find themselves at the end of a trail of financial dishonesty to the tune of millions or even billions. That connection between what they are doing are real value is somehow missing. Perhaps. Or could it just be that Jerome Kerviel is just a massive bellend?
I definitely felt like spending less during February whilst only using physical cash, compared to spending on card normally. I’m no technology-is-bad heretic either, I’ve always been for contactless payment, to me the tiny risk of some bugger stealing my card and using it to buy £20 worth of McDonald’s was worth taking on for reduced time spent in queues.
Another positive of only carrying physical cash was the absence of any overdraft or potential credit card debt. Unlike a card, which has a colossal bank behind it offering you an overdraft with behemoth charges and fees to match, the pocket you are carrying your coins in sadly cannot magic any more cash into existence. You can’t extend a line of credit with the pocket of your back pack.
There are arguments against using physical cash I found during a bit of research. It’s costly to produce and maintain, around $10billion is spent worldwide maintaining the physical cash supply. And physical cash, like your Uncle Barry, is down right filthy. Best stop sucking on this 20p coin to help me think.
Carrying a handful of bankcards around has quickly become the social norm, such that wandering about the first few times with no card (following my contactless blunder above) felt strange.
Holy shit, what happens if I NEED to spend more money than I am carrying, I CAN’T do that without my card.
Let’s be honest, that situation barely ever arises. And if it did arise it would be very unlikely to be life threatening and much more along the lines of “Fancy coming for a latte, mate?“. Yet it felt strange the first few times nonetheless. We have truly become used to convenience, and that’s what it boils down to.
The cost of convenience is quite staggering. We have become so taken by convenience that we barely notice quite how ludicrous the cost of convenience is. So much so that consumers will buy a 750ml bottle of water when out and about for only £1.99. Holy shit! This is the same stuff that comes out of our taps in our homes for £1.98 a cubic metre. That’s 1,000 litres, or the equivalent volume of 1,333 750ml bottles of water. for less that the cost of one bottle from a convenience store. That’s a mark up of 134,007% for convenience. If people gave the tiniest of shits in planning their days they could avoid ridiculous mark ups like that.
So how does all this relate to my Mini-Experiment? Having to plan how much money you are physically going to take with you forces you to plan your day and therefore evaluate each and every bit of spending.
Many people consider this an unbelievable feat of intelligence and foresight, but when Mr Z leaves the house for more than hour he thinks “It seems quite likely that I will get thirsty or hungry in this time, and no one likes me when I’m hangry**. I’ll fill up a bottle with some delicious nearly free water from my tap and grab an apple and some nuts to snack on.” Only using coins was like an extension of this, every time I left the house I needed to consider every tiny bit of expenditure and whether or not it was necessary. Even for some one like Mr Z who has been doing Frugal Press-Ups for over a year and a half since starting this blog, it was a shock to find that there is still more waste to cut out.
Trying to not use my cards for any spending for a month was an interesting experiment. Without a doubt it made the act of spending more difficult, through both having to actually carry money around and by coupling the act of consumption more tightly with value (i.e. spending physical cash is more ‘painful’).
It made it very difficult, if not impossible, to spend more than I was carrying. The line of credit offered by an overdraft or credit card, just didn’t exist without actually carrying the cards.
The conspiracy theorist among you might like the lack of traceability of cash, the Great Overlords can’t track your spending habits. The flipside of that is that either can you, at least not easily. Unless you are really careful, you quickly lose track of your spending habits.
Spending cash can result in a black hole, come the end of the month. There’s a trade off here, you are less likely to spend hard cash, but when you do it’s much harder to track where you actually spend it. And physical cash can have poo on it. Which, unless you are mighty weird, is a negative.
I’ve gone back to using cards, because they are more convenient than using cash. I’m not going to ritualistically cut up all my bank cards at 4am in my neighbours shed, just because it’s easier to spend more this way. As a result of this Mini-Experiment I realise that we have predisposed weakness in assigning too little value against spending done in an intangible form. Sure, it’s obvious when you think about it, but we generally don’t think all that often. It’s been a nice little reminder to question all expenditure.
As a society we pay far too much for convenience, when the tiniest bit of planning would have sufficed. And not only is convenience costly to us as an individual, it creates a lot of waste for society. I always knew this and generally do try to plan, to avoid waste as much as anything else. But seeing the mark up on bottled water was staggering.
Lessons learnt. Question every little bit of expenditure. And try to give the smallest shit and plan ahead a bit.
*Never did figure out why I felt guily
**Angry from hunger