If you want to spend less cash, skip the twenties and stock your wallet with
hundred-dollar bills, says Joydeep Srivastava, professor of marketing. Srivastava co-authored recent research that found people are more likely to
think twice about making a purchase when they carry one large denomination of
cash rather than many smaller denominations equal to the same amount of money.
This is because there is a greater “pain of paying” associated with breaking
a large bill. “If you want to cut back on your spending in this tight economy,
keep your cash in a few big bills vs. a number of smaller ones,” said Srivastava.
“You’ll be more reluctant to break that hundred-dollar bill, so you’ll end up
However, Srivastava also cautions against the consequences of a “what the
hell” effect that kicks in once self-control has been overcome. He conducted
three studies with co-researcher Priya Raghubir of New York University, and
found that once consumers decide to spend money, those carrying large bills
actually spent more than those with small bills.
“Unfortunately, once you break a big bill you’re less likely to pay attention
to the total amount you spend,” he said. “You’re more likely to throw
self-restraint to the wind once you’ve released the impulse to buy.”