As a waitress in my teenage years, I used to wonder why everyone gave me their most worn-out, crumpled and dirty dollar bills. According to a new study cited in Yahoo's The Exchange, people are more likely to dispose of crumpled old bills versus fresh, crisp and clean bills. It brings new meaning to the word, "new money." Of course, when I totaled up my tips at the end of a shift, it didn't matter to me that I had a roll of old money. I just washed my hands with soap.
A recent study was conducted by two Canadian researchers who set up a mock shopping lab to determine how the physical appearance of money affects spending habits. They discovered people spend more worn and tattered money than they do new bills. Perhaps people are grossed out by the fact that old money has been passed around and contaminated by the germs of other people. Evidently people take pride in carrying around crisp dollar bills. When other people are watching, though, they like to impress others by using new money.
I decided to see if I could alter the spending habits of people in my family by trying out different strategies for tricking them into spending less money over the weekend. I also wanted to trick myself into spending less money at the grocery store, restaurants and retail stores. Like the researchers in the study, I told my sons and husband that I wanted us to learn how to prioritize our spending. I didn't tell them I'd be trying to get them to actually spend less money because I know putting people on a budget can sometimes backfire.
Using cash instead of credit
Experts say that people tend to spend less money when they pay with cash instead of cash or debit cards. I decided to use the envelop system, which means I put cash in clearly labeled envelopes for different categories such as eating out, groceries, gasoline, clothing and entertainment. Researchers found that people feel a little pain when they have to part with their cash as opposed to using plastic. However, this new research indicates people feel even more pain when they part with freshly minted dollar bills.
Giving everyone crisp bills
Since I couldn't control whether my husband would receive a lot of crumpled, old bills when he received change from using a $20 bill, I went to the bank and obtained a lot of crisp clean ones, fives, tens, and twenties. I was strategic about placing fewer $20 bills in the "eating out" category since I know he would only need bills in a lower denomination.
I tried the new strategy for one weekend to see if we all spent less money. Everyone in my family stayed under budget. I realized that if we followed these approaches to curbing our spending for an entire month, we could conceivably save $300 a month as a family. Having an extra $3,600 a year would be enough money to pay for a family vacation or help us pay off our mortgage in less time. I am just not sure if it would work if my husband and sons were aware of why I swap out their dirty, crumbled bills for new ones. And, though there is some hassle involved, it would be worth it to me to save so much money.
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