Graeme Newell

Denomination Effect

Want to spend less and save more? Start carrying big currency in your wallet.

Let’s say you’re making a $20 purchase. Here are two typical ways you could pay:

A $20 bill and get no change back.
A $100 bill and get four $20s back.

Our CONSCIOUS brain understands that these two scenarios are the same. However, brain science reveals that our SUBCONSCIOUS brain is far less skilled at math. It tends to fondly remember that it once owned that big, beautiful $100 bill, and now it’s gone. Major bummer.

Sure, you got back four $20s in change, but your subconscious brain tends to fixate on one thing: $100 bills are nicer than $20 bills, and it wants that big boy back.

So if you want to spend less, take advantage of your subconscious brain’s bad math skills. Pay cash whenever you can and carry around big bills.