I can not help but wonder if this age of credit and debit cards is partially to be blamed for the erosion of Americans being able to save. It used to be when you got your paycheck you put some in savings, went grocery shopping, maybe out somewhere and made what you had left in your wallet last for the rest of the week. Now your pay goes right in the bank and everyone uses a card for everything. (well the majority of people do) I know of people that do not bother to even keep anything that resembles a check register anymore because they just check their balances on their phone, why write it down? This is a huge mistake I think because it is so easy to justify small purchases you might not make if you were using cash. "It's only $3 I have $45 left it's okay" Many people do not have savings deposited from their pay, it might not even be offered by the employer, so it is left to the person to be discipline enough to do it every week. The other thing, and this stayed with me from my father, is he used to say that having everything electronic as far as your money goes was a bad thing because then it would be to easy to figure out how much people had. Then business would know how much they could potential raise prices before someone could not afford something, and likewise how much tax a person on average could afford. Dad felt it was a sure fire way to erode your nest egg, he refused store club cards and debit cards all his life. It seemed crazy then, but with all the data collected on people maybe he had a point. Do YOU think these factors matter in a persons ability to save?
I think that electronic money does hurt our ability to save. There are sometimes that I am unsure of how much money I have in the bank because transactions do not post right away and sometimes I have less money than I thought I did. I am going to start dealing with actual cash and money orders again so I can keep it all straight.
It is definitely easier to save money when you stick to using cash. Maybe it is because you can actually see the money leaving your hand and going into the till. This makes the spend seem more "real", if you see what I mean? I take a note of everything I spend as things are tight right now. Using cash rather than my card has made me more aware of just how much I spend.
I agree one actually feels the pinch when paying for products in cash. Where I come from, most people use cash for their transactions. We are also going electronic and most people are still resisting it. We are able to pay most of our bills over the phone and check the bank balance. Saving has become so difficult because as you said money goes straight to the bank when one gets paid.There is no association with it. Besides, it takes a lot of work to keep tabs of expenses.
The ability to spend money one doesn't have [especially those who use credit cards] is what makes people reckless when it comes to saving. Back in time when all the money you'd spend is the cash you had in your bank account, you just had to budget and save a little cash for the rainy days. I'd have to agree that credit cards did negatively impact the [new] attitudes towards saving money. Apart from tucking away a little [cash] for retirement most people don't see the need for saving any more.
I don't think so, I mean, sure, we pay for things with a click or with a card, but at the same time we know that if those numbers (meaning money) disappear that we are in trouble...
The easier it is to spend money, the harder it is to save money. The fact that we can spend ourselves broke without ever leaving out home of course is a problem with savings. But the bigger problem is that big companies are better than ever at convincing us we need to ´upgrade´ immediately. Think about everything from cell phones to gaming consoles... you do NOT want to be the one using a cell phone that is ´last generation´..
Yeah, I feel that these days it's really easy to spend money, especially when we are online. We just add to cart, one click away and we bought it, so it's really dangerous.
Yes it has. Everything's right at your fingertips and wherever you go you're bombarded with ads trying to get you to buy stuff, which, for me at least, proves to be fairly convincing. I also buy stuff like airplane tickets on an impulse when I see some great offer from the low cost carriers. The good thing about the electronic age however is the existence of places like this forum where you can learn a lot about how to save and how to invest, so I guess things balance out for those with enough self control.
I don't think electronic payments prevent people from saving. It's actually the opposite in my case. With electronics, I can track my spending and see where I spend my money. How much goes for rent, clothing, food etc. The current culture prevents people from saving. College is unaffordable so people take out loans, due to these loans - car payments will occur, housing in unaffordable so a mortgage is added. (Because these are things you have to do to get ahead according to our culture) On top of that, what are your real awards for saving? After inflation, you maybe end up with 2-3% gains in a more risky investment type. In savings accounts, you loose money.
