Experts say using coins and pennies helps to budget
As the contactless revolution takes hold in the UK, more and more households are opting to use cash instead to help them budget. Two mums have revealed that they saved a combined total of £166 per week by ditching contactless payments and using cash instead. Experts say that using physical money makes us more mindful about our purchases and helps us keep track of our spending.
Cassie Cooper: Budget: £155.50-a-week; Weekly Saving: £106; Yearly Saving: £5,512
Cassie Cooper, a library assistant, saved £106 in just one week by setting herself a strict budget of £155.50 and avoiding unnecessary spending. She believes that cutting up her cards and continuing to use cash could save her over £5,500 over the course of a year. Cassie said, "It’s a really good trick to save money. It made me budget as I only have a certain amount to spend, whereas when I’m using my card I tend to be quite free with my budget."
Laura Myers: Budget: £120-a-week; Weekly Saving: £60; Yearly Saving: £3,120
Laura Myers, a sales assistant, saved £60 in one week by splitting her weekly budget of £120 into envelopes for essentials like food and petrol. She found that using cash made her less tempted to spend on unnecessary items. Laura said, "I tap my card so much that I have become complacent with it. It’s almost like it’s not real money. I’ve definitely spent less over the week."
Cash payments on the rise
According to the Post Office, cash withdrawals reached their highest point this year in November, with £878 million withdrawn. The banking trade association UK Finance reported that 6.4 billion payments were made with cash in 2022, a 7% increase from the previous year. While this is still dwarfed by the 13.1 billion contactless payments made with cards, it shows that the use of cash is still significant.
The benefits of using cash
Experts believe that using cash for transactions can make us more mindful of our spending. Clinical psychologist Dr Marianne Trent explains, "When you pay with coins and notes it feels more like you are spending money. In many ways, it doesn’t feel as real if you are using plastic and it’s easy to tap away without realizing just how much is coming out of your account. Using cash allows a more mindful approach and slows everything down. You are more likely to only buy what you need rather than all the things you want."
Financial control and mental health
Controlling our finances can have a positive impact on our mental health. Dr Trent says, "Money worries can create huge amounts of stress and lead to all sorts of health issues, so any way of better controlling your finances is good for your mental health."
Increasing use of cash
A Which? poll revealed that 52% of respondents found that using cash helped them keep track of their spending. Additionally, one in five people who do not currently use cash said they would start if the cost-of-living crisis worsened.
The challenges of finding cash
While more people are opting to use cash, it is becoming harder to find in some areas. The number of free-to-use ATMs has fallen by 13,000 in the past three years, and the number of banks and building society branches has also declined. However, banking hubs and the availability of cash through the Post Office are helping to bridge the gap.
Businesses embracing cash
Although many businesses have gone cashless, some are bucking the trend and accepting cash payments. Stella Coombe, who runs an independent gift shop, has noticed a rise in people using cash and believes that offering a variety of payment options is important for customer convenience.
Switching to cash can offer financial control and help us become more mindful of our spending. As the contactless revolution continues, it's worth considering the benefits of using physical money to manage our budgets.
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