Conscious Spending

I can't believe how many times I've asked clients where they've spent their money that's owing on a credit card. So if we have a client with a $4,800 balance on their credit card, I'll just literally ask them, where did you spend that money? Where'd it go? They can say, oh, well, the washing machine went, so there was $600 there. Well, what about the other 4,000? So what credit cards allow us to do is spend unconsciously. And what that really means is we're not conscious of where the money is going. It's just part of our subconscious patterns where it's tapping the card. But we don't have any sort of impact or consequence for that tap of the card because it's just numbers. It doesn't really feel real. We're not handing over $100 notes every single time. So where the credit cards sit is it allows us to spend unconsciously, and where cash sits, it allows us to spend consciously. For example, if we went down a bar and I had a credit card and was behind a bar, I promise you, you'd get a lot more drinks out of me than if I had to go and pay 50 dol, 60, $70 cash for every round that I was buying you guys. It's something we're all guilty of. We're all the same. It's a psychology play. This is pure and simple behavioral psychology. What they've done is they've registered people to ecg, which measures brain waves on everyone's spending, and they rigged a person up. They sent them shopping in Maya with a credit card to see what pain was registered when they purchased. So the ECG went like this. Very, very minimal registration on how much pain went through the body there using a credit card. They then spent it with a Visa debit card. Go shopping with a Visa debit card. The pain a little bit more of a spike there. They then gave them cash and said, now go shopping with this cash and watch the register of the pain on the actual ecg. And it spiked phenomenally there. We feel pain when we hand over cash because it feels real. When we tap a credit card, it doesn't seem like it's costing us any money. We haven't had any pain of money leav our wallets or having to hand anything over there. So everyone in this retail world is aware of this. If you go to McDonald's now, you'll just see paywaves all over the front counter. They don't want to open the till. They don't want you to hand over any cash. They just want you to tap and go. Tap and go. How crazy is this? I remember when there wasn't paywave and we used to have to sign or put a PIN in. These days, if you're putting in a purchase and it's over $100, you can't pay wave it, you've actually got to put in your pin. We're now getting frustrated because we've got to put in a PIN or we've got to actually do something to register that purchase. Whereas we just like the ease of payment. Pay, wave, tap and go. No stress, no pain registered there. So if I could give you one bit of advice, it's just really become conscious of your spending. And the best way to become conscious of your spending is to have a set amount of money to last you a set period of time. So I've got $600 to last me till Monday. What do I need? Not, I've got up to ten grand available on my credit card. What do I want? The minute you become conscious of your spending, the minute you actually change the amount that you spend.