Debt Advice for a Cashless WorldDec 06, 2016
When it comes to purchasing goods and services, cash is no longer king for the average Canadian. According to recent statistics, less than half of Canadians’ purchases are made with cash and 77 per cent of Canadians prefer using debit or credit cards over currency. Almost two-thirds say that they rarely buy anything with cash anymore. Despite the relative ease newer emerging digital payment technologies bring, they could be problematic for some. Tapping your credit card or swiping your smartphone, while undoubtedly convenient, can also cause a disconnect between you and your money. It’s easy to lose track and spend more than you intended. If you’re going cashless, there are some key strategies you can use that will help you keep your spending and your debt in check. Here’s some advice for doing just that:
1.) Avoid the digital disconnect
According to a recent study conducted by MasterCard, users provided with a tap-enabled credit card typically spent 30 per cent more than they previously would. Why? It’s likely because digital payment options like tap-enabled credit cards and Apple Pay lack the tangible feeling of spending that using currency provides. It’s also likely due to the fact that your overall spending isn’t limited when using this type of technology. If you choose to use a digital payment method, it’s important to remain mindful and disciplined with your spending. Set a limit and don’t exceed it.
2.) Cashless doesn’t’ mean budget-less
Make a budget and stick to it. As a cashless consumer, you may not need to plan how much cash you’ll withdraw from the ATM each week, you still need to invest time in planning your monthly and weekly expenses. If you’re not sure where to start when it comes to building a budget, a budget worksheet can help you in this planning process.
3.) Don’t ignore your debt
It’s important to not ignore the amount of personal debt you carry, as well as any effects your cashless consumption may be having on your debt levels. Use a debt calculator to help you determine where you stand when it comes to your debt. Once you have a clear picture, you can also use a debt repayment options calculator to determine which debt repayment strategies will help you pay off your debt in the most effective way.
4.) Seek help with debt
If you’re confused about the debt options available to you or if cashless consumption has caused you to experience problems with debt, it’s important to seek help as soon as possible. A Licensed Insolvency Trustees (LIT) can suggest effective strategies that will help you deal with your debt and regain your financial balance.
5.) Use new technology to help manage your finances
One last piece of debt advice: if you are regularly using mobile payment apps or other digital payment methods, look for digital tools to help you manage your finances. New technology make retail transactions easier, but it can also make the task of managing your finances less complicated. Budgeting apps like Wally and Mint are great personal financial management tools that can help you create a budget, monitor and track your cashless spending and even set and track financial goals and priorities.
Are you a cashless consumer? What debt advice tips would you share for a cashless world? Join the conversation and share your thoughts with BDO Brockville using the hashtag #BDODebtRelief.