Tim Harford’s recent column for the Financial Times, reproduced on his blog, addresses the challenges of living in an increasingly cashless society.
What is the main challenge? How easy it is to spend money!
With contactless payments, Apple Pay, Amazon’s one-click payments, it’s never been easier to spend money. Online stores have, oh-so-kindly, removed pretty much all obstacles and any friction for us parting ways with our cash and sending it their way.
Many of us now struggle with impulsive buying online.
We’ve all experienced getting carried away, seeing something we want online, clicking buy, and – before even recognising what we've done – realising something new and shiny is on route to our home.
What can we do about this? Here’s what Harford has to say:
On the FT Money Clinic podcast, I recently advised a listener who felt guilty that she was spending impulsively online, and often regretted and returned the purchases. One suggestion I had for her was that instead of buying immediately, she should instead write down each item on a spreadsheet, to revisit at the end of the month. She would have time to reflect, and she would also see the cumulative price tag for all her temptations.
My thinking was that by making the spending harder, slower and more conspicuous, she might gain some degree of control. It was only afterwards that I realised how directly this advice was swimming against the commercial tide. Harder, slower, more conspicuous? Companies have long wanted spending to be fast, easy and barely worth a thought. Thanks to the miracles of modern technology, they are closer than ever to realising their desires.
Even if that doesn’t have us all rushing to setup a new spreadsheet, there’s wisdom here.
We need to break away from the urgency of ’now’ with our spending.
No one else is going to help us. We have to find ways to make our spending of money harder and slower.
Stepping away and coming back later can make all the difference in ensuring we don’t regret what we buy. And help us stop losing track of what we spend.