To Save Money, Ask for Pretty, New Dollar Bills
People like their cash fresh and clean, and they’re more likely to hold on to those neat bills than spend them quickly
People like their cash fresh and clean, like OutKast’s wardrobe, and they’re more likely to hold on to those neat bills than spend them quickly. Dirty cash, on the other hand, encourages fast spending. At least that’s the conclusion of a new study published in the Journal of Consumer Research.
The researchers arrived at these findings after observing how undergraduate manage their bills. The students tended to ditch the ugly, worn money first and foremost. However, when the students knew they were being watched, they tended to pull out the swank new bills—as a matter of pride, the researchers surmised. Bloomberg Businessweek elaborates:
“People want to rid themselves of worn bills because they are disgusted by the contamination from others, whereas people put a premium on crisp currency because they take pride in owning bills that can be spent around others,” the researchers write.
The professors call this a “push-and-pull emotional mechanism”—people desire to spend more when they have undesirable bills and spend less when they have fresh ones. Bloomberg Businessweek again:
Distaste for older bills is not completely irrational. The researchers note that when the U.S. Federal Reserve removes a bill from circulation, it’s usually not because it’s worn but because its “soil content” is too high—i.e., too many bacteria are living on it. Yuck.
In other words, perhaps people are so skeeved out by those well-worn, germ-ladened used bills that they’d rather ditch the cash than risk contamination from the anonymous, dirty masses that pawed the money before them.
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