On our Facebook page last week we shared an ABC News story about new data which show that Australians prefer using cards over cash. We commented that cards make personal budgeting more difficult because it’s easy to lose track of spending. Our suggestion is to withdraw your living expenses in cash so you can closely watch where your money goes.
Let’s take the discussion a step further…
Imagine ordering your usual mocha-chocka-frappuccino and instead of reaching for your wallet to pay, you swipe your mobile phone instead.
Of course, what I’m describing isn’t imagination. It’s a product from Google that already exists. Google Wallet plans to turn our cashless society into a walletless one.
How does it work?
Google Wallet stores your credit card details or allows you to deposit credit into a Google Wallet account. To pay, you enter a security code into your phone and wave it over a Paypass or payWave terminal. These terminals are already in use in some retail outlets in Australia.
When it comes to security, Google’s answer is that their virtual wallet is safer than your real one. They argue that if you lose your phone, your Google Wallet is still password protected. Plus, you can cancel your telephone SIM card without cancelling any of your banking cards.
But what does it mean for personal budgeting?
I appreciate that the mobile phone has replaced everything from our wrist watches to our street directories. To some extent, online stores are even replacing our shops. But I’m worried that Google Wallet is yet another way to make spending way too easy. And spending without thinking is a dangerous financial habit.
What are your thoughts? I’d love to hear from you. Please post your comments on the MyBudget Facebook page!