Here’s a quick money experiment for you.
Take a $100 bill (or a significant currency note) and place it on a table in front of you. And then keep your debit or credit card beside it. Now close your eyes and imagine going out to purchase an item that you need. Visualize engaging in the transaction, and paying cash for it. After that, repeat the same exercise but this time pay for it via your debit or credit card.
Now, open your eyes and look at the bill and your debit or credit card. Chances are you will find yourself developing an attachment towards your $100 bill and Benjamin Franklin on it, while no significant feelings will arise when you look at your plastic card.
The reason is that we feel a sense of loss when we pay by cash. In the above case, that $100 bill is never coming back to us and Uncle Ben is gone forever. But with the card, this is not the case — that card ain’t going anywhere! We know it’ll come back to us again, in the comfort of its home, our wallet.
Paying by cash is a painful experience because we feel the loss of our money but with the plastic cards (whether it be a credit or debit card, a Starbucks Rewards card, or any other incarnation of it), the fact that we’re losing money never registers in our brain. In short, plastic cards comfort us as they fuel our false illusion that we have enough money for our purchases even when we don’t.
Having known this truth, it’s entirely your choice now: Do you want to live under an illusion and risk overspending your funds, or keep Uncle Ben safe with you, and only let go of him when the need is there?