"Breaking" a note and how it affects rate of spending.

galwayguy85

A buddy of mine who happens to have the Apple Watch and can now make contactless payments (see I.T article http://www.irishtimes.com/business/technology/apple-pay-contactless-service-launches-in-ireland-1.3000151) in whichever stores supports it has been, naturally, extoling the virtues of such a system. Not having to carry a wallet when he goes out is one of those perks and secondary to that he doens't need to sweat about being put into a position where he can only get 50's from the ATM and needs urgently to pay for a bottle of water, just to pick an example. In most shops this is no big deal. I know it's a different situation in taxis etc, where the float is normally relatively small.

He argues that once a 20 or 50 euro note gets 'broken' the rest of the change just vanishes into the ether soon afterwards. I would contest that the units of cash are just in smaller, more discrete units - 5s, 10s and 20s and whatever else in terms of coins. It's still up to the individual to manage their money after getting their change back from the cashier.

If anything, I would argue that when you have tangible money in your wallet you can more easily plan your day-to-day budget. Electronic/contactless payments may lead to more frivilous spending, but again, that all rests on the individual.

Do you think that those who get into a panic at 'breaking a note' have an actual rationale?

galwayguy85

Reluctance to pay for an item with a large denomination note and the belief that it (or its equivalent value) will soon be gone upon being broken would appear to be an example of circular reasoning.

Your Face

Anything else or will I wait another hour?

LeinsterDub

My wallet never ran out of battery

MilesMorales1

I find having tangible cash in my wallet makes me spend more. If I have a note and I spend some of it, I usually end up with change, and when I have change I'll spend it on anything cos I think 'oh well its only a few coins'
Whereas using contactless doesn't produce change, and it doesn't end up with me holding a certain amount of cash I've decided isn't worth holding onto.

sbsquarepants

I buy what I need / want.
I don't spend money just because I have it in my pocket, makes not a blind bit of difference to me if it's little pieces of metal & paper or 1 and 0's somewhere in the ether, I spend at the same rate.

galwayguy85

MilesMorales1 wrote: »

I find having tangible cash in my wallet makes me spend more. If I have a note and I spend some of it, I usually end up with change, and when I have change I'll spend it on anything cos I think 'oh well its only a few coins'
Whereas using contactless doesn't produce change, and it doesn't end up with me holding a certain amount of cash I've decided isn't worth holding onto.

I tend to let all my coppers just gather in a jar at home. They never get spent. May be I'm actually worse-off and should go 'contactless' afterall.

Glenster

galwayguy85 wrote: »

Reluctance to pay for an item with a large denomination note and the belief that it (or its equivalent value) will soon be gone upon being broken would appear to be an example of circular reasoning.

No.

Wanderer78

The plan: to rid us of all cash, thus making our economies cashless.

Why: so to take full control of our monetary systems, making it easier in future economic crashes to enact things such as bail ins etc.

osarusan

My father used to say that when he wrote a cheque for something, it never felt as real to him as handing over actual cash.

whiskeyman

osarusan wrote: »

My father used to say that when he wrote a cheque for something, it never felt as real to him as handing over actual cash.

Generations before him probably said the same about handing over this new 'paper' money just wasn't the same as handling over real shells...

scamalert

apple and savings shouldn't be used in same sentence,seems your buddy is happy to part with cash either way.

granted ATMs sometimes have 50s,but dont see logic if one has 49e to spend the rest because its not a single note ?and given that you can use contactless or just pay with card,its seems more personal thinking flaw.

Badly Drunk Boy

The tangibility of money makes you more aware of it, so when you're spending, you know you're spending it. Using contactless, you could be spending more but you just don't get the reminder in the form of change. I'm not saying that using cash doesn't also take your 'money' out of action. There are probably many jars with hundreds of euros in coins all around the country.

However, to illustrate my original point (sort of), the wife of a friend of mine does the accounts for an elderly woman who's loaded. She has often written cheques for €10,000 for each of her 3 (grown-up) children on a whim but the next day she'll be asking:

"Where's the €10 note that was in my purse yesterday?".

"Eh, remember we bought that thing in the shop? There's a fiver and a €2 coin still in your purse."

It's not quite the same, but the cheque is her generation's version of contactless (versus cash).

oppenheimer1

Wanderer78 wrote: »

The plan: to rid us of all cash, thus making our economies cashless.

Why: so to take full control of our monetary systems, making it easier in future economic crashes to enact things such as bail ins etc.

Nonsense. Government's can do that in a cash based society anyway.

The advantages of cashless society is that it's cheaper, but it's also harder to evade taxes.

BrokenArrows

oppenheimer1 wrote: »

Nonsense. Government's can do that in a cash based society anyway.

The advantages of cashless society is that it's cheaper, but it's also harder to evade taxes.

Cashless society will eventually happen and then we will have negative interest rates.

I would actually love to move to a cashless society.
No more ****ing beggars pissing me off every morning and evening.

Wanderer78

oppenheimer1 wrote: »

Nonsense. Government's can do that in a cash based society anyway.

The advantages of cashless society is that it's cheaper, but it's also harder to evade taxes.

that is true and has indeed already been done but its easier in a cashless society, it also makes it difficult for the likes of bank runs to occur. sadly governments dont have much control of our monetary systems anymore, as its largely privately owned and run.

BrokenArrows wrote: »

Cashless society will eventually happen and then we will have negative interest rates.

I would actually love to move to a cashless society.
No more ****ing beggars pissing me off every morning and evening.

we already have negative interest rates, thankfully they aint all that common, yet!

MooShop

This is actually an interesting TED talk I watched recently around this subject. Touches on some of the points brought up here, talks about how current and future generations view money.

When we were younger we always saw our parents deal with cash, whether that be going to the bank, using an ATM etc. But for the current generation they see cash used less and less frequently and this video brings up some interesting points around how this generation view money/transactions etc.

Winterlong

BrokenArrows wrote: »

I would actually love to move to a cashless society.
No more ****ing beggars pissing me off every morning and evening.

They will just be sitting there with a NFC terminal instead of a hat.

PARlance

Hold on here a second!!!

Your friend has an apple watch and is giving advice on sensible spending habits???

doolox

Ordinary cash will never go away totally while there is a need for untraceable money transactions within the mindset of many people in society.

Many efforts have been made by governments in the past to tie everything down to cheque or EFT methods and get rid of cash.

Customs men hate to see large amounts of cash on a travellers person for a few reasons. They may be drug or arms dealers or doing something else illegal but also it may be money which a person wants to dodge tax on by hiding it outside the country in an offshore account.

As soon as governments across the world get rid of cash money you can expect taxation to rise to swingeing amounts. People in this situation will cut back drastically on their efforts to find work and many needed jobs will be left undone or unfilled. We as a society have not yet reached the stage where all work is pleasant and people naturally like doing it not only for the money.

I'd say there are very few bin-men or child minders out there loving every minute and doing their work for the sheer joy of it but they are essential member of society. Likewise commercial fishermen, miners, prison officers, policemen and A&E staff who have very onerous but essential jobs.

Put too much tax on a job and it will not be done. Already it is getting very hard to fill some of the jobs I mentioned because of high costs and high personal taxation.

I cannot see cashless currency catching on unless there is a cast iron guarantee that it is anonymous and not allowed to be shown to the tax man.

Graces7

I often find I am delighted by the amount I have in coin when I thought I was nearly out of cash. Bu t then my spending is confined to daily bread etc..

__Alex__

I definitely spend less by paying for most things by card. For example, I have an exact shopping list for groceries so when I pay for those things by card, I pay the exact amount my list cost. If I pay with cash, I get change that I just then spend on whatever. If I'm in a shop where I need to bring the spend up to a fiver to use the card, I buy useful things like toothpaste or sugar to get over the limit. That way, I don't buy rubbish, I buy things that can then be knocked off the grocery shopping list. I actually forget to carry money now in instances where I do need to have cash on me. I love not carrying money on me.

galwayguy85

__Alex__ wrote: »

I definitely spend less by paying for most things by card. For example, I have an exact shopping list for groceries so when I pay for those things by card, I pay the exact amount my list cost. If I pay with cash, I get change that I just then spend on whatever. If I'm in a shop where I need to bring the spend up to a fiver to use the card, I buy useful things like toothpaste or sugar to get over the limit. That way, I don't buy rubbish, I buy things that can then be knocked off the grocery shopping list. I actually forget to carry money now in instances where I do need to have cash on me. I love not carrying money on me.

Would you buy toothpaste and sugar together? Two items that seem somewhat at odds with each other.

I went to take out 70 euro from an atm to pay for something, it would not give it to me it was only dispense 50 euro note so rather that take out 100 euro. I took the 50 out and routed in my wallet and bag to make up the 20 I needed. At the end of the day it make no difference I don't have any more or less money, but psychologically taking out 100 euro is different.

galwayguy85

mariaalice wrote: »

I went to take out 70 euro from an atm to pay for something, it would not give it to me it was only dispense 50 euro note so rather that take out 100 euro. I took the 50 out and routed in my wallet and bag to make up the 20 I needed. At the end of the day it make no difference I don't have any more or less money, but psychologically taking out 100 euro is different.

Yes, that is the crux of my initial argument. It really is all just psychological at the end of the day. Pay apps and whatever else aren't going to turn a miser into a philanthropist or vice-versa.

jester77

Cashless is fantastic. You just tap and pay and that is it. No fumbling for change or counting it out.

It drives me f**kin nuts when a person at the checkout waits until everything is scanned and only then decides to take out their wallet/purse and start counting coins.

Plus, you know exactly where you spent what, so you can easily budget. If you take a 50 out of the ATM, you will never know what you spent it on when you do your budget at the end of the month.

Alcoheda

Wanderer78 wrote: »

The plan: to rid us of all cash, thus making our economies cashless.

Why: so to take full control of our monetary systems, making it easier in future economic crashes to enact things such as bail ins etc.

A (mostly) cashless is on the cards but I don't think control will be centralised.

For better or worse, the mostly likely scenario is one of many different crypto currencies with varying legitimacy, privacy and applicability.

nice_guy80

I got caught with no cash in my wallet a few weeks ago when I was somewhere I needed a note to pay - somewhere outdoorsy

Could not remember the last time that I paid with a note in supermarket, filling station, restaurant

I think you are more likely to spend money with a card...
once you don't physically have to hand over money it becomes less of a conscious decision

Grayson

OP, does your friend think the amount of money he spent on an apple watch, which will be obsolete in a few years, is worth the savings from not breaking notes?

galwayguy85

Grayson wrote: »

OP, does your friend think the amount of money he spent on an apple watch, which will be obsolete in a few years, is worth the savings from not breaking notes?

A fruitless thing to say (to him) in this case. This lad has more or less given up his life to the company both personally and professionally.