We’re only a few years away from a fully cashless society. Does it make you stop and think about how this transition can impact our mental well-being? It’s my business to wonder and share some insights with you. So let’s dive in…
With the rise of digital payment systems, mobile wallets, and contactless transactions, cash is redundant. While this shift brings convenience and efficiency, it also has a significant impact on our mental well-being. Let’s first look at the pros and cons of a cashless society.
The pros
1. Convenience: One of the biggest advantages of a cashless society is convenience. No more fumbling or worrying about carrying enough cash. With digital payments, transactions are quick, seamless, and can be done anytime, anywhere
2. Personal safety: Cash transactions come with inherent risks such as theft and loss. Going cashless reduces these risks. I know at my local shopping centre, people have been watching older customers use the ATM only to grab their bags minutes later.
3. Financial Tracking: Digital transactions provide an excellent opportunity for individuals to monitor their spending habits closely. With detailed transaction records available at our fingertips, we can gain a better understanding of our financial behaviours and make more informed decisions about budgeting and saving.
The cons
1. Privacy Concerns and data-mining: One of the major concerns is the loss of anonymity. Our financial transactions leave a digital trail when we use digital payment methods. This can lead to a sense of being constantly monitored, which may make some individuals feel uneasy or paranoid. Additionally, the fear of identity theft or fraud can also contribute to increased stress levels.
2. Emotional Disconnect: The convenience of digital payments can also contribute to a sense of detachment from our financial situation. It's easy to swipe a card or tap a phone without fully comprehending the consequences of our actions. This lack of awareness can hinder our ability to make informed financial decisions and may lead to long-term financial instability.
3. Impulsivity: The tangible nature of physical cash often creates a psychological connection between you and your money. In theory, with all the apps out there we should be able to manage our budgets better than ever before (see pro 3) however, going cashless means losing this tactile experience, which can lead to a sense of detachment from financial decisions that potentially affect our emotional well-being. This can lead to impulsive buying decisions and financial stress down the line.
When I was younger, I’d needed to wait to buy a CD or a pair of shoes. I had time to think about whether it was worth it. Now, in a bout of insomnia, I can buy anything straight away. Online gambling also means you no longer need to physically go to the casino or TAB to place a bet. You can do it anywhere, anytime.
Let's talk about strategies to address these concerns and promote better mental well-being in a cashless society.
I could go through all the financial hints and tips about managing finances, but a) I’m not a financial adviser and b) there are plenty of YouTubers covering the subject already. But going cashless isn't the core of the issue. Instead, let’s focus on the relationship between the material (representing money) and the emotional.
What if we replaced the idea of ‘healthy financial habits’ with ‘healthy habits’? How would that change the way you see money? Remember, for this blog, money is represented by material things. If you think a pair of shoes you’ll probably wear once took 3 hours of work to buy, are they worth it? Is it a healthy choice?
How do material things make you feel? If you’re mortgaged up the wazoo, paying for a house you only use a quarter of are you happy?
A dollar isn’t a dollar. You might take home $1000 this week, but you had to earn about $1,200. Pay $200 in tax, then GST on any purchases. So when you buy that shirt on sale, it really costs you double. Is it still a bargain? And if it makes you happy, for how long?
In short, develop a mindful approach to your relationship with things, experiences and money. Be conscious of how these things make you feel. Is each transaction bringing you closer to your goals or further away? Are the highs fleeting or long-lasting?
I always ask my clients ‘If a miracle happens while you sleep and everything you want comes true, what does life look like?’ If you ask yourself the question, what’s the answer? Are the steps and actions you take every day bringing you closer to the goal or further away?
So find ways to reconnect with the value of money. Set aside time for activities like mindful spending, where you consciously think about the impact of each purchase on your overall financial well-being. It's also helpful to engage in open conversations about money with friends and family, as this can foster a healthier relationship with finances.
Lastly, it's important to strike a balance between the convenience of digital payments and the need for financial awareness. Finding ways to incorporate physical reminders of your financial transactions, such as keeping receipts or regularly reviewing bank statements, can help maintain that connection between our actions and their consequences.
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