It's a scientific fact: spending money releases dopamine, that elusive "happy" hormone. From love to social media to substance use, we chase it in various ways, all in an effort to stave off the existential dread of living life on a spinning blue planet with no purpose. But for some, this pursuit can take a toll on their bank accounts, especially with the rise of instant payment methods.

I won't go as far as to claim that I was a completely responsible spender before the age of digital payments. But let's just say that the convenience of UPI, credit cards, and buy-now-pay-later apps certainly exacerbated my "shopaholic" tendencies. And it's not just me, any of my friends and colleagues feel the same way; the 'appification' of payments has made us careless and dramatically increased our monthly expenditure. 

So, I tried something: I resolved to use only cash or my debit card. Over two months into this switch now, my Swiggy and Blinkit orders have stopped featuring unnecessary extras, and my trips to markets have become more focused on needs rather than whims.

The Downfall Of My Financial Health

First, a recap. I was late to the digital payment scene. While most of my friends were already splitting bills through apps, I stuck to cash. Eventually, however, when I finally succumbed to the allure of instant payments, everything changed.

In my cash-heavy days, I had a charming notebook where I would diligently record every expense - a habit passed down from my late father. The "expenses today" list was a daily ritual, much like skincare and brushing my teeth. From a ?30 auto ride to a ?3,000 shopping spree, everything was documented. But once I transitioned to digital payments, the practice of journaling waned: why keep a record when my apps tracked everything for me?

Then came a month when I shockingly spent almost 90% of my salary on the first day of the month itself. Sure, a majority of it went to bills and utilities, but online purchases I didn't really need made up a fair share of that whopping spend. The thing was, the convenience of just 'swiping' on an app made it too easy. Why walk to an ATM or even think twice, when a single tap would do?

By mid-month, I'd check my bank account and would be overcome by a wave of dread. My expenses had skyrocketed. But a different kind of 'bait' was waiting for me just around the corner: quick credit. "No worries! I can just use my credit card or one of those buy now, pay later apps," I'd tell myself, and move on.

Little did I realise how dangerous a cycle this was.  

The Vicious Cycle of Credit and BNPL

Credit cards and buy now, pay later (BNPL) options may seem like lifesavers, but they often work against us. They lure you in with promises of instant gratification, disguising their pitfalls behind shiny interfaces. Social media is a big culprit: it bombards us with curated lifestyles, leading us to get trapped in a never-ending cycle of overconsumption. It's all about 'keeping up'.

But such quick credit apps can have lasting repercussions. A 2023 report by the US's Consumer Financial Protection Bureau showed how users of buy-now-pay-later services were far more likely to have bank overdrafts, payday loans, pawn loans, and other high-interest financial products. In a nutshell, the ease with which they offer short-term financing can leave you more financially vulnerable if you are not mindful of your spending. Living paycheck to paycheck while juggling credit card bills only deepens this financial rabbit hole. A survey conducted by IIT Delhi earlier this year, involving 276 people, found that 74% of them felt they were overspending due to quick digital payments. 

Practical Solutions For Impulsive Buyers

When I finally took stock of my financial habits, I discovered something crucial about the psychological impact of handling paper money. Counting bills and paying in person makes you more mindful of your spending. A colleague told me how once he decided to re-adopt cash for some expenses, even entering his UPI pin would force him to pause and consider whether that ?5,000 purchase was truly necessary. It's this moment of reflection that saves us from impulsive purchases. 

Inspired by my own experiences and my colleague's insight, I developed some strategies for those of us who struggle with impulse buying.

1. Mindful UPI Spending

I'm not advocating for a complete return to cash - digital payments are part of our modern lives. But we can be more mindful. One effective method is to set a weekly spending limit - a UPI wallet can help with that - for digital transactions. For example, a colleague told me how he decided to allocate ?2,000 for small purchases each week. The practice helps in decluttering your bank statement and focusing on what you truly need.

2. Cash-Limited Shopping Trips

When I go to flea markets, I carry a specific amount of cash-say ?2,000 to ?2,500-and leave my card at home. I'm now more deliberate about what I choose to purchase. It's reminiscent of my college days when every rupee counted, and budgeting was essential.

3. Buy Now, Pay Now

While it might feel great to indulge in BNPL schemes, they can lead to regret. It's tempting to acquire the latest gadget or trendy item now and pay later, but the consequences that follow can be overwhelming. 

4. Keeping A Journal

Returning to tracking expenses has been incredibly beneficial. Whether you prefer pen and paper or a budgeting app, keeping a record of your spending helps maintain accountability. Noticing how quickly small expenses accumulate has reshaped my mindset.

There's no denying that digital payment methods like UPI have improved many aspects of our lives-from convenience to ease of transaction. In fact, contrary to my experience, many, especially people from low-income groups, are even saving more due to UPI as every small payment is added securely to their bank accounts. A robust digital economy has helped with the financial inclusion of large segments of the population.

All in all, it's about spending mindfully and finding a balance, whether it's cash or UPI. While credit and BNPL options can be useful in emergencies, they shouldn't become a regular part of your shopping routine. Good financial health is necessary to enjoy life's little pleasures without the burden of regret.

(Anwiti Singh is Assistant Producer, NDTV)

Disclaimer: These are the personal opinions of the author