How to spend less

Ever since the 2000 rupee note came out, my spending behaviour has changed. Now, when I’m considering buying something, the first thought that goes through my head is, Will the vendor accept my 2000 rupee note? It’s almost a parallel process: as I’m browsing through the goods on display, I’m worrying if I’m going to have to argue with the vendor about accepting my note because I don’t have change. The longer I browse, the more nervous I get. Many times, I walk away because I just don’t have the energy to engage in the impending argument. This alone dissuades me from even browsing.

No doubt, the 2000 rupee note has made a dent in my spending. I spend less. This is, in good measure, because of the above marketplace concern, where nobody is willing to accept the large note happily and the buying-selling interaction has become an unpleasant, sticky experience.

The other significant reason behind my reduced spending behaviour is the “bigness” of the note. It is so high in value that I want to hold on to it. It gives me a sense of security to see it in my wallet; I feel rich. In fact, it feels like a serious endeavour to break the note, akin to a major life decision that must be taken. Is it worthy? Does it uphold my values? Will I be a better person because of it?

By contrast, with smaller notes, say 100 rupees, it doesn’t feel so monumental. Yes, 100 rupees also carry a good value, but it feels more amenable to being used. The value is small enough to be friendly to use. It feels made to be spent. These days, it is the go-to currency note if you have to travel any reasonable distance by auto rickshaw, buy vegetables for the evening meal, or pick up a decent book to read.

There is an in-between note that has been introduced, the 200 rupee note, but I haven’t made up my mind about it yet. It’s like an awkward adolescent: it doesn’t really know who it wants to be yet, but it feels like it’s a big boy and should be sitting with the adults. Most of the times, I overlook it as I scrounge up small denominations even as I try to leave the 2000 rupee note untouched.

This kind of mental accounting of cash is not weird, just in case you think there’s something wrong with me. It’s a very real human phenomenon, which has been researched and documented. It’s called the denomination effect. Most likely, you recognized yourself in the scenarios I described above.

So what’s the takeout? If I want to spend less, I’m better off holding a 2000 rupee note in my wallet instead of 20 notes of 100 rupees. I will hesitate. I will defer the purchase. I will do something else (like maybe call up my mom and cheer her up with a nice, long chat).

Of course, all of this goes out the window if you’re the kind to whip out a credit card. Then, the gods be with you. I have noticed this about myself, that without the pinch of separation generated when spending cash, I am able to spend on large ticket items much more readily. It just doesn’t feel as big a deal as when I’m counting out the cash notes. In fact, it feels painless. (That is, until the month’s credit card bill arrives. Then the swearing and the regret kick in in full form.)

Avoiding spending is hard. Everywhere we turn, there are enticements that keep pushing us to buy things we didn’t know we needed or that promise us they will turn us into the person we secretly yearn to be. It takes a lot of discipline and willpower to resist, to be responsible.

That’s why, these little tricks help me. A big note. A single credit card. Low balance in the digital wallet. These things make me think twice about spending, because I’ve made it harder for myself. Where the world is paving a smooth road to spendthriftness, I’m putting in the speedbreakers.

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