Three ways to curb your contactless spending
Technology is changing the way we live all aspects of our lives. Whether it’s renting a pet, teaching yourself a new life skill, or managing your money from your phone.
But while this is delivering convenience to customers, it could lead them into troubled water, particularly when it comes to contactless spending. Research shows that there were 7.4 billion contactless taps in 2018, up 31% on the previous year.
In an increasingly cashless society, it can be easy to lose track of the money you are spending, especially as you don’t physically have a £20 or £50 note in your wallet that you can see disappear when you buy something.
There are simple things you can do in your day-to-day life to get a handle on your spending, and still be tap-happy without breaking the bank.
Trial and test
A major issue with contactless spending is that people simply don’t know where their money is going on a day-to-day basis. Ringfence a one or two-week period to monitor, review and revise your contactless spending habits based on your usual daily expenses.
This will help you refine where you are tapping your card aimlessly, and where this functionality genuinely helps you.
If you’re burning through cash too fast and coming to the end of your budget before the week or month is up, take some time away from your contactless spending to see if it makes a difference and slows down your spending.
Use tech to your advantage
There are a number of money management services that you can link up with your direct debit accounts to monitor transactions in real-time, have an oversight of all direct debits and set budget pots for various outgoings.
In a way that you can’t with traditional banks, these types of services let consumers review their spending to the second. Some services provide notifications as soon as a transaction has taken place on plastic, such as Monzo, creating the same feeling of parting with money as when spending with cash. Other services include Plum, a chatbot that records user spending and encourages them to reach savings goals, or Squirrel, which holds money in a controlled account but transfers money to the relevant accounts the day before a bill or direct debit is due.
Our OpenMoney app is also on hand to give you advice on your financial situation and how you can best make the most of your money, and then give you access to money management tools to do this.
As well as partnering your debit account with a spending monitoring service, consider using online budgeting tools to help streamline your weekly contactless spends when it comes to essential and non-essential items. Some tools, such as Mint, allow you to input your financial circumstances and details of your lifestyle and outgoings, in order to create a tailored and sustainable week-by-week and month-by-month budget.
Check for payment issues
A delayed payment is when the company you have paid for a good or service waits to drawdown the value of the contactless transaction. In some cases, this can be up to four working days.
This makes it is easy to be lured into a false sense of security for a number of days about the true sum left in our account. As a result, you are left thinking you have more money to spend than you actually do.
To avoid any unexpected charges when using contactless, ensure you have a buffer in place to account for any delayed payments that may take some time to come through. Tracking where you’ve spent your money will also help jog your memory when checking over your statement, if it hasn’t yet been processed.
It is equally important to check the amount on the screen or card machine when you are tapping for a transaction, to ensure you are being charged the correct amount. It is easy for an extra ‘0’ to be added to an item that should actually be £4, so being diligent with the cashier or waiter is vital to ensure you aren’t paying more than you should be.
Hayley Millhouse is head of advisory services at OpenMoney and evestor