A new study says shoppers are less likely to spend money if they carry $100 bills than if they have $1 or $5 bills in their wallet.
“Some consumers see large bills as more sacrosanct than a bunch of chump change,” says a story in Time magazine about the study, which will be published in the Journal of Consumer Research. The downside to carrying big bills is that once we break the $100, we are likely to blow the rest of our wad.
I rarely carry cash because I spend it so quickly. I prefer to use my credit card for most purchases because at the end of the month I have a record of where my money went. With cash, it is too easy to forget how I spent my money.
Welcome to Bargain Babe! I’m Mara, and I’m so glad you’re here. I am an obsessive bargain hunter and penny pincher, and I am determined to live a full life without EVER paying full price. 
I definitely agree with the whole carrying larger bills around–it takes me longer to break a $20 or $50 or $100 when I have them!
I’ve started trying to take out my weekly (or bi-weekly) “daily spending allowance” in cash (the budgeting route that works for me, personally…I know it doesn’t work that way for everyone!). It REALLY helps me to save money and think about what I’m buying. I have the cash, and once it’s gone, I am not allowed to spend any more money until x date. It’s a good way for me to cut out what I don’t REALLY need to buy, and a very good way to keep myself in check when I go out to dinner or bars with friends!
Maggie, your system sounds a lot like mine! I give myself a set amount to spend every month and when it’s gone, I have to sit tight until the start of the month. Glad to hear you found a budget that works for you!
I think the article has a certain amount of psychological logic to it. I, too, would be less likely to spend money if I had to break a $50 or $100 bill on my person. It also helps that many places won’t accept bill denominations over $20. If I had to pay for something in cash, first I would grab my loose change, then I would proceed to use $1 bills looking for the most faded ones first and keep going from there. Personally, I rarely carry more cash on me than needed to buy a tank of gas or a $5 lunch. 99% of the times, I pay with a credit card and enjoy the additional benefit of cashback rewards. However, I will carry a few large bills on me when I am traveling just in case of an extreme emergency. If I have not spent the cash upon my return home, it goes right back into my money market account.
I too have started to carry around a cash allowance that is to pay for food and all other misc purchases for the week. If I have money left over at the end of the week then I subtract that from the money I will use the following week. This has made me much mor aware of spending and I constantly am watching how much cash I still have near the end of the week