Today, I went to the market with my mom. When I came back home, I was astonished with the amount that I had spent on a little purchase. I bought 4 keychains; 2 hair accessories and 2 bracelets of Rs 80 each as they were on sale. My ₹640 were spent. The real issue is that while I was making the purchase, I didn't feel the money leaving my pocket and I wasn't thinking that such a small purchase would turn into this amount. I was shocked completely. This made me thought about the cons of online payments, so I am here to share it with you.
Every day, we make transactions. Some may be in the form of cash while others may be in the form of UPI. Both types have their own pros and cons. However, this article is based on my personal experience, that, why I feel that the UPI is draining our pockets every day.
What the Studies have shown?
A recent study by the IIT Delhi has revealed that :
1] 74.2% of the users had reported increased spending after UPI.
2] 7% of the users have reported reduced spending after UPI.
3] The National Payments Corporation of India says that over 700 million UPI transactions take place in a day.
Real life example: Below is a list of your daily expenses and a combined monthly expenditure. Data is based on hypothetical figures👉
Tea/Snack ₹80
Lunch ₹150
Online shopping ₹250
Transport ₹100
Others ₹120
Total = ₹700 [Daily expenditure]
Expenditure over 30 days would be ₹21000/-
Did you realize that you have spent so much over a period of 30 days, most of the time, you paid digitally without the physical cash leaving your pockets.
What's wrong with UPI?
1] Less visible cash: When you pay online, there is an absence of the regret associated with the physical form of cash leaving your pockets. So, you may not feel that much of emotions when your little purchases turn into large expenditures.
2] Convenience: Digital payments are super quick, like you have to scan a QR or enter a 4 digit pin which takes a few seconds. On the other hand, you count the entire bundle of notes when it comes to cash payments. We tend to admire what is quicker, efficient and conventional.
3] Small Transactions: As I have mentioned above, small payments of ₹80 -8 times was ₹ 640. If that was made in cash, I would have taken seconds to think whether I actually needed those stuffs.
4] Frequent Payments: We swipe card for this and that. We scan every shop's QR. That Beep sound after successful payment is constant everywhere. Combine the monthly spent amount, for me, that was in Lakhs surprisingly💀.
See, I am not here to say that Cash is better than UPI. I only want you all to recognize a behavior worth examining.
Practical solutions:
1] Set limits: Fix a weekly spending budget and stick to it.
2] Review Transaction History: Check your UPI transactions weekly to identify unnecessary expenses.
3] Pause Before Impulse Purchases: Think twice before making an unplanned purchase.
4] Track Daily Expenses: Record every UPI payment to monitor your spending.
5] Compare Weekly Spending: Compare actual expenses with your budget to identify overspending.
Here is an experiment for the weekly expenditure analysis>
DAY SPENDING
Monday ₹
Tuesday ₹
Wednesday ₹
Thursday ₹
Friday ₹
Saturday ₹
After seven days, calculate your total UPI spending and identify how much went towards essential, planned and unplanned purchases. You may discover spending habits you hadn't noticed before.
Remember: UPI is not the problem; unplanned spending can be. Being aware of where your money goes is the first step towards better financial management.
UPI has made payments faster and more convenient, but this convenience can sometimes make us less mindful of our spending. The solution is not to stop using UPI, but to use it wisely. By tracking transactions, setting spending limits and avoiding impulse purchases, we can maintain better control over our finances.
in Banks & Banking books
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