The wallet is a funny thing. Whatever money we put in it is bound to be pulled out easily in a very quick fashion. And many times, we don’t even know where, when or for what purpose we brought out the money.
If you don’t believe me, try putting Php5,000 in your wallet in Php1,000 denominations. Don’t put any other amount of money there. Now see if that money will last for even a week and if you can remember where you spent it.
Here’s another thing: do we feel guilty with spending money in our wallet in a quick way with hardly a clue as to how it was spent? Not really because money in our wallets quickly become loose change or “barya” that we don’t put too much value on. This behavior is a convoluted way of applying the materiality concept in accounting.
So the combination of having easy access to money that we see as not amounting to much makes us spend that seemingly less valuable money fast and without much guilt. Withdrawing money from wallets is like a stainless steal.
Now try depositing the same Php5,000 in Php1,000 denominations in a passbook account, one that does not have any ATM attached to it. You will notice that what is reflected in your passbook account is the total balance, not five Php1,000 balances. Even the deposited amount, provided you deposited all of the Php1,000 at the same time, will reflect only one amount, Php5,000.
Check that account’s balance after a week. There is a very good chance that you would have more money in that account after a week than the balance you would have in your wallet for the same length of time. Why? Because it is harder to spend one large amount of money than many smaller amounts, even if the sum total equate to the value of that one large amount. Plus, with the need to fill out withdrawal forms each time you withdraw money from your passbook account, you will tend to remember better where you spent your savings.
So to have better control over your money, keep them first in a passbook account, the one without an ATM attached to it. And by the way, don’t put debit and credit cards in your wallet as much as possible because they only give you easy access to your money.
At the same time, we perceive money from debit and credit cards as plastic money and, therefore not as real and valuable as notes and coins. Thus, we tend to spend plastic money faster and without guilt.
Moreover, debit and credit cards are not exactly considered legal tender. Legal tender, like notes and coins, immediately extinguish a financial obligation from say buying items from a grocery store or cell phone shop. With debit and credit cards, it is only after the merchant gets the actual cash credited to his account that your financial obligation to him is extinguished.
Again, don’t keep too much money in your wallet. Remember that all wallets have “holes”.
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