Saturday, March 27, 2010

Pay Cash, Feel Rich

I am seeing people paying in cash more often in commercial transactions, and for some people, it seems to significantly affect their self-image and the meaning they associate with their actions. When you pay with a credit card, you might understand that you are paying with the bank’s money, and this can lead you to feel that you have no money of your own. Many people have the same feeling with debit card payments, perhaps reflecting the very complex bank rules that surround these transactions. But almost everyone who pays in cash seems to feel that they are paying with their own money is borrowed.

For some people, the change from paying with a card to paying with cash leads them to suddenly feel rich. At the same time, it may lead them to take their spending decisions far more seriously. The self-talk seems to involve statements like these: “Look at all the money I have. I must be important. That means the way I spend money is important. I have to set a good example in the way I spend money.”

None of this makes sense in the accounting sense. You can, in theory, spend money in exactly the same way, with the same quality of decisions, regardless of the form of payment. But money is not just an accounting abstraction. Money is magic. If you discover that using money in a certain way makes you more magical, then do it that way, and don’t worry if your inner accountant argues that it shouldn’t.