Personal Finance

The cashless world. How to build resilience towards payment transparency?

A cash or cashless budget

Does our payment method affect the way we spent money? Do you think it’s best to use cash, credit card, or other e-wallet payments? Apparently, it does, and the easier you pay, the more you spend.

Because of that, sometimes, it is good to use a cash budgeting system to save money. However, the truth is you can’t run away from going cashless. Yes, we can still do some withdraw from ATM and pay things in cash. But in 5 years, you will probably give your kids allowance in an e-wallet. The next generation might not even remember cash; they first purchase apps using their parents’ fingerprints.

Instead of resisting change, we need to teach ourselves and the next generation how to work with a cashless system. It’s a life skill.

How can cashless system work for you

When done right, spending with a cashless system helps you save over paying cash, provided you don’t accidentally elevate your lifestyle.

Apparently, we will spend 30% more when we use a card instead of cash. 🤧It’s called the payment transparency factor. Gosh, such a complex word. I guess it means human behavior, and it’s somewhat impossible to be 100% proof from that factor.

But I think we can build resilience towards it. If we only spend about 5-10% more with cashless methods, the benefits can outweigh the cost.

How can you be resilient when using cashless payment?

For starters, use monopoly money

Yes! You got that right. Print out some “legal tender notes” of your own or use monopoly cash in your wallet ( In Malaysia, you can get the RM4 local “billionaire” monopoly game set). Every time you spend, destroy, or remove the notes out from your wallet in equal amounts. Basically, you still use cash/envelop budget but just counting it towards your card.

This method works amazingly well for me. When I use this, I don’t even spend more than how much I do with cash (destroying monopoly notes means I have to buy a new set).

Use credit card limit features (selected banks)

Some cards allow you to set a different daily limit / monthly limit or amount reminder for the card you use. If you set RM2,000 as the card limit, they will send you a notification that you have exceeded, although the credit facility is still available to you. It’s a good way to track your expenses if you don’t want to manually record things down—it works when you use one card to pay for everything.

Next, remember your budget and (MUST) keep track of your expenses

Some people are wizards in money, so they don’t need a fixed budget. But if you’re prone to overspend when you go cashless, budget is important to set the boundary of how much you spent.

And you must keep track of what you spend, even if it’s just an RM0.20 transaction fee. This is non-negotiable for cash to cashless transition.

Also, record the expenses before the transaction.

Another great way to build resilience towards cashless transactions is to record your spending before you spend instead of after. Like, tally up the total when you place something in the cart when grocery shopping or note down the clothes purchase before you reach the payment counter.

Finally, pay credit card bill in full

Pay your credit card bill in full, pawn your family heirloom if you need it. Don’t give yourself an excuse to make a minimum payment. There are no excuses.

Alternatively, use a debit card

The sure way to not overspend, but you will miss out on all the benefits of using a credit card and still prone to spend more with payment transparency.

Always get trap by low installment payment offers?

I do know friends who choose to upgrade their lifestyle by using installment. That rarely ends well. Installments are not meant to upgrade your lifestyle.

Installment itself is not bad when we use it on things we need. Personally, I don’t make a purchase decision based on the payment amount. It doesn’t make me buy the branded bag I see on IG or sign up for 80 days around the world cruise. I only consider the benefit of installment payment after I have decided to buy something.

And I will record the expenses in full for the month. If the installment is RM85 for 12 payments (total ~RM1000), it would appear in my expenses tracker as RM1,000 spent this month and hurt my paper heart.

My rule: If you can’t pay for something in cash, you have no business to talk about making it installment (House exempted).


I know I don’t speak for everyone, but cashless payment is my friend, installments works to my advantage. How about you? Is cashless payment your friend or foe?

One thought on “The cashless world. How to build resilience towards payment transparency?

  1. So far, I am able to control my expenses. I guess, I am ok with cashless payment. You are right when you said in the near future, people will only use cashless payment.

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