194. Why Tap-to-Pay Is Costing You More Than You Realize

What if one of the biggest reasons people overspend today is not that they’re reckless — but that spending no longer feels like spending? In this episode, Laura unpacks what she calls the swipe-now economy: a world of tap-to-pay, one-click purchases, drive-thrus, smartwatches, and convenience-based spending that removes friction and makes money easier to forget. 

Using real-life examples from her own week — gas, dental bills, In-N-Out, and even a surprising question from her daughter at the drive-thru — Laura explores how modern payment systems have changed our relationship with money. She also shares research showing that people are willing to spend more with cards than cash and explains why friction is not punishment — it’s protection. 

In this episode, you’ll learn:

•  Why tap-to-pay and one-click purchases make spending easier to justify 
•  How the loss of friction dulls your awareness around money 
•  What Laura’s daughter noticed at the drive-thru that most adults miss 
•  Why friction helps your values speak louder than your habits 
•  Simple ways to create more awareness in your own spending right away 

Closing CTA

This is exactly the kind of thing Laura helps uncover in a Budget Deep Dive. You’ll look at where your money is actually going, where your habits are taking over, and how to build a spending plan that matches what you value most.

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Transcript

Laura 0:00

What if one of the biggest reasons people overspend today is not that they're reckless, but rather their spending no longer feels like spending? We live in a swipe now, tap now, move on economy, and when money stops feeling real in the moment, it gets a whole lot easier to let it go. You are listening to the Money and Legacy Podcast with Laura Sexton. I'm helping families pay off debt, grow wealth, and build a legacy without sacrificing what matters most. This is where money feels easy. Hey, accelerators. Still getting ready for that cross-country move, but I wanted to talk to you about the swipe now economy. Have you seen these things online where... And they've been filling up my feed. Maybe it's because I love money things, but these people are getting magic wands off of Amazon, and your, your credit card or your debit card will fit into the star portion of the wand. So as you pull up to the drive-through, you can just reach out your magic wand and tap to pay. It's cute, it's hilarious, and it's actually how a lot of us feel when it comes to tap to pay. It's as if we have created this magic wand for ourselves where you just pull the card out, we tap, we move on. We don't even have to type in a pin. You just tap and go, tap and go. And the problem with that is there's no friction. There's no pause. There's no emotional connection to the money that's leaving. I can do this with my watch now, where you click the watch a couple of times and then you tap it onto the card reader. I don't even have to take my wallet out anymore. So there's not even the rustling around and the digging the card out of the wallet, which why do they make it so difficult to get your driver's license and credit cards out of the sleeves of a wallet? Make it just a little bit easier, please. People aren't even looking at the total anymore because when spending gets frictionless, it also gets forgettable. Just this week, I had to go get gas. I have no idea how much it cost. I put my card in, and then I pump the gas, and then I drive away. I didn't have to look at what the total was until I got home and balanced my account and I was like,"Oh, that's how much gas was. Holy cow. That's expensive." Sometimes I know because the pump will stop at$100 and it won't go over, so you know, that's awesome when you have gas that's nearing$6 a gallon. You'll hit that almost every time. It's terrible. But another time that it was just completely forgettable for me this week, which is really unfortunate, was I was at the dentist office- And my daughters had to get some dental work done, and it was frustrating. because it was a lot, and it hurt me almost as much as it hurt them, I think. I had to pay the bill, because the work's been done, we gotta pay it, we gotta move on. And I got home, and I pulled out the receipt and I was like,"Oh." I was so relieved. It was only$629, not 692. Still an incredible amount of money for dental work, but you can only do so much. it didn't even sink in how much I was spending. This is why it matters so incredibly much: the older payment methods that we used to have made you feel as if you were losing something, because cash was leaving your hand. You had to pull it out of your wallet, count it out, hand it over, and hope that you were getting change back, but probably not. Sometimes we would count it down to the penny. Here are my dollar bills, here's my change, and pennies... Oh, that's not even a thing anymore, is it? We don't do pennies anymore. It feels almost crazy to think about how we used to have to stop and do this. Can you imagine, though, going back just a little bit further, what it feels like to write a check? You have to stop. You have to fill it out. For those of you that haven't filled out a check in a while, you have to put the date on it. You have to write who you're writing the check to. You write the numerical value, and then you write out longhand the actual value so that you make sure it's double, double blind there, make sure that you got both of them. And then you have to sign it. And if you're really ambitious, you would put something in the reference column so you know what you wrote the check for. You had to stop, and you had to write the amount twice in two different ways, in number and in letter. There was friction. Now, even swiping a card feels more deliberate than doing this tap-and-go situation. But regardless of tapping or swiping, there's a lot less pain than when we used to write a check or use cash. There was a research study done at MIT where it found that people were willing to pay more with credit cards than cash. In fact, it's 15 to 18% more with credit cards than with cash. And newer research says that electronic payments hurt less than cash. There's a physical pain when you push cash across the counter as opposed to handing the card. See, the less you feel when spending, the easier it is to justify the spending. Amazon has figured out that if you make it one-click purchasing, people are much more likely to click. Have you ever been to one of these websites where you have to go through 47 pages before you get to sign out? If you go to a website and you have to click multiple different things and you have to answer a whole bunch of questions, it makes it harder to finalize the transaction. However, when you go to Amazon, it's one or two clicks, two-click purchase. You sure you want this one? Great. Buy it. Crazy. Amazon knows that if you remove the friction, people are more likely to buy. How this shows up in real life, it's just really crazy how this really lined up very nicely for me in a teaching lesson kind of way. We left the dentist and we went to In-N-Out. It's maybe not the world's best decision in theory, but the girls had missed their lunch period. They needed food before they were going back to school. What was funny is my seven-year-old's in the backseat, and she realized that people were going to two different windows, and it's the first time she's kind of noticed the drive-through situation and commented on it. And she said,"Mom, is that guy gonna take our money?" And I said,"Well, yes and no. He's the guy that we pay for our food, and so I'm going to give him money for it." And I hand over my card, and he hands it back with a receipt, and she goes,"Why is he giving the money back?" This is the whole point, my friends. Children still understand an exchange economy. They understand that if I give something, I will get something. I trade a toy to get a toy. I hand over money, I receive food. That is how their brains work. That is how we were wired to create. But with a card, I hand it over, they hand it right back, I still get the item. I get both things. I get to take the currency back to my pocket, and I get the item. That makes the exchange feel free There's no visible loss. And when there's less friction, because there's no pain... We tend to do it more often. You see, tap-to-pay hides the trade. In the same way that I didn't know how much the gas cost me, I don't know how much that In-N-Out full ticket purchase was. I pay it because I was expecting to hand over my card and move forward. What I'm telling you right now is I'm in this crazy season of moving, and so I have a dulled awareness. I'm less able to pay attention to the things that really matter, the things that are important to me and my family. Why is that the case? Because there's so much going on in my life around me. It is chaos that I have chosen, and it's a terrible choice, and I didn't make it consciously, but I have chosen this. I have chosen to make balancing the accounts at the lowest point on my list of things to do. In fact, today, out of 26 things, balancing the account is number 24. Yes, I do have 26 things on my to-do list. Am I gonna be able to get to all of them? No, probably not. But I'm gonna do everything I can to do as much as I can because that's the season that I'm in. I wouldn't suggest not paying attention. And now that I'm saying this out loud, I can't go back to putting my head in the sand because I'd be making a conscious choice to not pay attention to my money, and that's absolutely insane. Why am I telling you this? I'm sitting here wanting you to come to me so that I can coach you on your money, and I'm telling you that I'm struggling right now. I'm in a season of struggle. I'm telling you that because I love you, and I want you to know you're not alone. I'm right in this with you. I also struggle from time to time, but that is why I have a coach. That is why I have somebody to reach out to. And now that I'm saying this out loud, sharing this with you, I'm really having this revelation moment where I realize that friction is such a gift. Friction makes you slow down. Friction makes you look at what's happening. Friction gives your brain a moment to catch up. I need my values to speak louder than my habits, and friction allows that to happen. Creating friction is not punishment, my friend. It is protection as friction is something that I need in my life. I'm going to have to go back to cash until the end of this move season, and I'm realizing that right now in real time, and I am literally going to go to the bank and pull out cash, and that is the only spending that I'm going to be able to do. I'm thankful that we're having this conversation right now. I'm thankful that I'm going to be able to deal with that in real time. This is the work we do as coaches. This is the work a financial coach can do with you, can see your pattern and work through it, find the mindset behind it, find the habit, find where the friction point needs to be. So here are some examples of friction that I want you to add into your life. I want you to look at the total before paying. Say it again with me, for the people in the back and for me. Please, Lord, help me. Look at the total before paying, and say the amount out loud. Whoa. That is one of the craziest things I've ever said out loud. You have to say the amount out loud before you can pay for it. This is going to make you go,"Do I really wanna spend that much money right now?" Now, with the dentist, couldn't change it. That's how much it cost. But you need to be able to say the amount out loud so that you can retain it, or at least recognize how much it is before you spend. Anytime you have a problem category, go ahead and use cash. That's why I said I'm gonna get cash. I'm gonna make sure I'm not overspending my fun money. I'm gonna make sure I'm not overspending our out-to-eat money. Again, we're in a season of transition, so as far as our budget is concerned, There's extra money in those line items because we are in a season of transition, and we do know that that's going to be necessary. We don't hold to it's the same thing every month and it doesn't ever change. No, of course it changes. Now, this is something I've already done remove stored cards from any online purchasing sites. Not only have I worked very hard to remove my cards from every online site, but I have also gotten new cards recently so that I would not have the number memorized. And if I'm not typing it in to do online purchases, I'm not likely to remember the card for more online purchases. Wait 24 hours before any impulse purchases, 24 hours before going to the grocery store. Write your list on Wednesday, and then go on Thursday. And then I need you to review your receipts. Now, a lot of us, because we're tapping, we're like,"No, thank you. Don't need a receipt." Why? Because it's just easier to not carry a piece of paper, not wait the extra two seconds for it to print. Guys, wait the extra time, take the receipt home, and track your spending daily. Not everybody do I ask to track their spending daily. Eventually, you get to the point where you can do it every couple of days, every three days, every week. But if you are in the habit of spending, spending, spending, and you can't even tell me where your last four purchases were, you need to be tracking your spending daily. Because friction's not about making life harder, it's about making your choices more honest. And this is where we have to add the friction in. As you're listening to this, I'm assuming that you are assessing your own spending actions. I, I hope that my honest take on my spending actions are helping you see where your spending is actually coming in. And think about where you're just swiping without thinking, or tapping without thinking, or where have you taken out your magic wand to magically pay for things? I need for your convenience to be replaced with awareness. We have to add some friction in or we're just going to continue to spend and spend and spend. Not everyone needs the same system. You choose the friction that is going to help you wake up. But here's your takeaway for the day. Assess your spending habits and decide what kind of friction you need to create on purpose for you and your family. Where in your life has spending become so easy that it feels like you've taken out a magic wand to pay? Friends, if you haven't even looked at your budget in a long time and you have no idea what you're supposed to be doing, let's do a budget deep dive where we sit down, help you ascertain where you're actually spending your money, where you want to be spending your money, and align your budget, align your spending plan to the things that you value most. If that sounds great, all you have to do is scroll down in the show note, click the Connect with Laura button, or go to accelerateyourlegacy.com/claritycall. That's all you have to do to get on my calendar. Remember, guys, when spending gets friction-- When spending gets frictionless, it also gets forgettable. So put some friction in place and go out and make a difference.