Do ATMs Make Us Spend More?

The Automated Teller Machine (ATM) is one of the most important inventions of the 20th Century. We might not notice its significance, as we probably use it everyday and for most young people, they have been around since forever. But those who are old enough remember the dark days of having to line up to a teller just to withdraw some cash. They also recall the horror of banking hours ending and their money being locked in what seems like forever. It was definitely a good idea for banks to buy an atm.

Life with the ATM is so much different now. The main use of the ATM is in an emergency. Imagine yourself rushing to the hospital in the middle of the night. You would need money for the hospital admission or to buy prescribed medicine. In this situation, the ATM is a lifesaver.

boost consumerism

However, there are some dissenting views on the idea that the ATM is a godsend. From a different perspective, the ATM is sent by the devil. How can such an invention have such opposite impressions?

There are certain factors of the ATM that contribute to this negative view:

ATMs are strategically located to boost consumerism

ATMs are placed on the malls, right in the middle of the sale area. Some banks even tie up with gadget shops, to entice people to buy. They actually study this.

ATM fees make people withdraw more

Transaction/Usage fees of ATMs have hiked. They can charge you as much as 5$ to withdraw from ATMs outside their network, In such a situation, it is a valid argument to withdraw more money (I’d rather withdraw 200$ even though I just need a 20$ to save on transaction fees). When the money is in your hands already, it is easier to spend.

Dispensing higher denominations

Even when you withdraw within your network (sans the transaction fee), many ATMs do not dispense denominations lower than 20$. In some cases, the lowest is 50$. Thus, people will end up breaking their budgets. When banks and shopping centers made an effort to employ strategies that will make you spend more, it is foolish to blame them for our lack of financial stability. There are also strategies to outwit your ATM.

Withdraw a fixed budget at one time

Set a fixed amount that you will spend for a certain period of time. That way, you only need to visit the ATM and transact once.

Withdraw for a specific purpose

For any subsequent withdrawals, it should also be a very specific amount for a very specific purpose. Do not withdraw any more than that.

Use envelopes

Keep your money in specific envelopes. For example, one envelope for the phone bill, one envelope for the power bill, etc. The envelope gives you the idea that the money is off limits. Better yet, consider the money spent (if you can’t pay it right away). If the money is in your wallet, it still gives the suggestion that it can be spent.

Banks and shopping centers inevitably have their own agenda that can cause financial ruin for some, but we are not mindless victims. While we may have strategies to help you outwit them, The best strategy is still discipline and self-control.

To be money smart, it is suggested that you consult an expert. Take for instance Adam Jiwan. He can be your go-to person in case you have doubts with money handling and related concerns.