For the first time in a decade, the use of cash is on the rise in the UK. Increasingly, consumers are opting for notes and coins as opposed to plastic in response to the cost of living crisis. Can using cash help you stick to your budget?
This does not constitute advice and advice should be sought in all instances before acting on it.
For a long time, the use of cash has been on decline, with people preferring to use debit or credit cards to pay for goods and services, but with the recent cost of living crisis, many are switching back to cash. Having something tangible helps you keep track of how much money you are using as opposed to checking your accounts online or in an app, letting you have more control of your spending habits.
Realistically, for those who have trouble sticking to a budget using card only, switching to cash might be a great way to manage their budget. With the constant threat of inflation and the pressure of the cost of living crisis, if you have the willpower to only use the cash you have on hand, you can better plan for expenses knowing that once your cash is gone, there is no more.
This trend follows on from the jump in the total number of payments across all methods that we have been observing over the last year. Consumers have changed their approach to purchases, making multiple trips to the supermarket instead of one big shop. Likewise, because of the rise of remote work, instead of purchasing season tickets for their commuting journey, people are opting to buy single journey tickets on an as-needed basis.
However, the most interesting bit to come from the study is the comeback of cash. Even with the fact that many businesses have gone card-only since the pandemic, the use of notes and coins rose by 7% last year to reach 6.4bn payments.
The use of cards has been on the rise every year for some time, with the number of people living “largely cashless lives” (using no notes or coins at all or only about once a month) hitting 23.1 million in 2021, but 2022 bucked the trend, falling to 21.6 million.
The report did caveat these figures, stating that, “Once inflation falls and consumer confidence in the economy returns, we expect a return to the long-run downward trend in cash usage.”
Are you having issues planning and sticking to your budget? The experts at Dental & Medical Financial Services are happy to help you build a financial plan that will help you stick to your budget in the short-term while also helping you achieve your long-term financial goals. Get in contact today.