Are You Losing Money with a Cashless Lifestyle? A Financial Planner's Guide to Smart Usage and Saving Tips

"Cashless is convenient and you earn points, so it's a great deal, right?"

Many people likely think this way and have made shopping with just a smartphone the norm. Credit cards, QR code payments, electronic money... the contents of our wallets in modern times are becoming increasingly light.

However, if you feel like "I'm using cashless, but for some reason I'm not saving money" or "I realize I've spent too much and can't remember what I bought," that might be a warning sign.

In fact, cashless payments hide "money pitfalls" that cash does not have. Behind the benefit of earning points, there is no end to the number of people who end up spending money without realizing it.

In this article, I will explain the decisive difference between those who 'lose money' and those who 'gain money' with cashless payments. I will also share concrete methods to use them wisely and profitably without falling into cashless traps.

"Cashless can be the best tool to help your household budget, or it can be the greatest enemy that erodes it."

Please read to the end so that cashless can become an "ally that helps your household budget."

Why do we spend too much money with cashless?

If you believe, "I don't use cash and I get points, so I must be saving money!" then be careful. Cashless payments have a major pitfall called "the difficulty of visualizing money."

When shopping with cash, you can clearly see the money decreasing from your wallet. Five 1,000-yen bills becoming four, coins jingling and increasing... This "pain" acted as a brake on spending money.

However, cashless payments are different. You complete a payment just by holding your smartphone over a reader or touching a card. Because there is no physical exchange of money, the feeling of "spending money" tends to fade. It might be close to the feeling of using coins in a game.

Furthermore, you must be careful of the "psychology of being swayed by points."Many cashless payment services are designed so that the more you use them, the more points you earn. Of course, points are nice, but many people end up buying unnecessary things just to get these points, thinking, "I might as well buy it here since I'll earn points" or "I'll buy it now because points are doubled."

For example, suppose you are shopping at a supermarket and think, "I'll buy this seasoning because it gives more points than usual." However, if you already have stock at home, or if it's a seasoning you don't use much anyway, it ends up being a waste of money. This is a case of putting the cart before the horse, where you "consume to earn points." It is a typical example of falling into "point poverty."

A Financial Planner's Advice! 3 Habits of People Who Benefit from Cashless

So, how can you avoid the traps of cashless and manage your money wisely? I will introduce three habits that I practice, having looked at the household budgets of many people as a financial planner.

Habit 1: Limit your payment methods to 1 or 2

This is the prerequisite for mastering cashless. If you have too many payment methods, management becomes complicated, and it becomes difficult to see how you are spending your money.

What if you had many credit cards in your wallet? You might get confused at the store register wondering, "Which card gives the best deal?" or find it troublesome to check the withdrawal dates and statements for each one. The same thing is happening with cashless payments on your smartphone.

By carefully selecting your favorite payment methods, you can manage your money simply and efficiently. For example,

• "Use a credit card with a high point return rate for everyday shopping"

• For utility bills and fixed costs, use a 'credit card that earns miles or specific points'

In this way, by narrowing it down to just one or two options based on your purpose, managing your money becomes significantly easier. Since points are also concentrated on specific services, there is the added benefit of being able to earn a substantial amount of points more quickly.

Habit 2: Thoroughly 'visualize your money' by linking with a household account book app

To compensate for the biggest weakness of cashless payments, which is the lack of 'money visualization,' using a household account book app is essential.

Many cashless payment services have a feature to link with household account book apps. Once you set it up, information is automatically reflected in the app every time you make a payment, allowing you to see at a glance when, where, and how much you spent on what.

[Specific ways to use it]

• Link with credit cards and bank accounts: Automatically import payment history.

• Set categories in detail: Classify expenses by setting your own categories such as 'food expenses,' 'social expenses,' and 'daily necessities.'

• Review regularly: Check the app's reports every weekend or at the end of the month to see what you overspent on this month and where you can save.

Even for those who are not good at keeping a manual household account book, it should be easier to continue with an app that records everything automatically.

Habit 3: Thoroughly use different methods for different purposes

Once you have narrowed down your payment methods, next, be conscious of using each payment method 'by purpose'.

• [Example 1] Daily food and daily necessity expenses

  • Purpose: Save money without strain

  • Recommended: Debit card

  • Reason: Because it is deducted immediately from the account balance, it prevents overspending. You can set a clear rule that bank account balance = money you can use.

• [Example 2] Fixed costs (rent, utilities, communication expenses, etc.)

  • Goal: Accumulate points efficiently

  • Recommended:High-reward credit cards

  • Reason: Since these are expenses that occur every month, you can steadily accumulate points.

• [Example 3] Large purchases (home appliances, travel expenses, etc.)

  • Goal: Level out the burden on your household budget

  • Recommended:Credit card installment payments

  • Reason: By combining this with options like bonus payments, you can avoid straining your household budget even when you have a large one-time expense.However, you must be careful about interest rates and fees.

In this way, by choosing your payment method according to the "purpose" of your spending, you can reduce unnecessary expenses and accumulate points wisely.

Summary: Cashless payments become your greatest ally when used wisely

In this article, we introduced the pitfalls of cashless payments and recommended ways to use them.

Finally, I will summarize the key points I wanted to convey in this article into three main takeaways.

1. Cashless does not equal saving money. Understand that it is difficult to "visualize money," which carries the risk of overspending.

2. Limit your payment methods to one or two. By simplifying your management, you can eliminate unnecessary spending and accumulate points efficiently.

3. Link it with a household account book app and review it regularly. Master convenient tools and make managing your money a habit.

Cashless payment is a convenient tool that enriches our lives. However, it is important not to be swayed by its convenience alone, but to use it wisely and with intention.

I hope this article serves as an opportunity for you to review your cashless lifestyle and make managing your money more enjoyable.

Thank you for reading until the end.
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