Why more Australians are turning back to cash

A recent 7NEWS story about Sunrise host Nat Barr’s week-long cash-only challenge has reignited a conversation many Australians are having as they look for practical ways to manage their household budgets.

Barr swapped her credit card for notes and coins for an entire week, expecting to encounter resistance in an increasingly digital world. Instead, she found that retailers were happy to accept cash, with many telling her they were seeing more customers choosing to pay that way.

The biggest surprise, however, was her own spending behaviour.

By physically handing over cash for each purchase, Barr found herself thinking more carefully before spending. At the end of the week, she said she intended to continue using cash because it had made her much more conscious of where her money was going.

Her experience reflects what researchers have been finding for years.

A 2024 meta-analysis by researchers from the University of Melbourne examined more than 70 studies involving more than 11,000 participants across 17 countries. Their findings were remarkably consistent: people generally spend more when paying with cashless methods than when paying with cash.

Whether it’s a credit card, debit card or buy now, pay later service; digital payment methods were all associated with higher spending than cash.

Researchers describe this as the “cashless effect”.

Researchers believe one reason for this is surprisingly simple. Paying with cash is a physical act. Counting out notes and coins makes us more aware that money is leaving our wallet, creating a natural pause before we spend.

By comparison, tapping a card or phone is quick and effortless. That convenience is valuable, but it can also make it easier to lose track of how much we’re spending, particularly when making several small purchases throughout the day.

At a time when every dollar counts, the way we choose to pay can make a difference. For many Australians, cash is becoming more than simply a payment method. It’s another practical tool for budgeting, helping people keep track of spending and make more considered purchasing decisions.

As National Seniors Australia continues to advocate for choice in how Australians pay, its partnership with ATMx helps support something equally important: reliable access to cash. Together, we are helping ensure people can continue to use cash when it suits their needs, whether that is for budgeting, convenience or peace of mind.

As Nat Barr discovered, something as simple as paying with cash can change the way we think about spending. While everyone’s budgeting approach is different, cash remains a simple tool that many Australians are rediscovering as a way to stay mindful of their spending.

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