Canada | Financial Literacy

Paying digitally: 7 expert tips for staying on top of your spending

It’s easy to overspend when you don’t see money leaving your hands. But you can counteract the urge to splurge with these strategies. 

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Woman using credit card for online shoppingStudies show we’re more likely to make an impulse purchase when we go cashless, so it pays to wait before pressing “buy” (Getty Images/Kathrin Ziegler)

Like many other countries, Canada has been easing away from the use of cash for some time. But with the pandemic, that evolution has naturally accelerated, as growing numbers of consumers and businesses opt for contact-free forms of payment such as e-transfers, payment apps, credit and debit. 

There are many upsides to going cashless: as CPA Garth Sheriff, founder of Sheriff Consulting, points out, it opens up more payment options. “It also eliminates the need to make a trip to the bank or carry cash around,” he says.

On the flipside, however, cash-free payment gives rise to the risk of identity theft and credit card fraud. Also, people tend to spend more when using a card than when using cash or cheques. (Restaurant diners paying with plastic leave larger tips, for example.) 

At the core of these differences is what researchers call a psychological “pain of payment.” As Sheriff puts it, “When you use physical cash, you see it leaving your hand, but when you just press a button or flash a card, it doesn’t feel like the same expense, even though it’s identical.”

Fortunately, there are ways to overcome this cognitive behavioural challenge and keep your spending in line when going cashless. Here are some tips.


When using cards, P2P apps or other forms of digital payment, it’s more important than ever to keep track of your transactions as you go. As Sheriff points out, there are various budgeting apps, such as Mint or Expensify, that can help you keep on top of your outlays, but you can also use a Google spreadsheet or other methods. (Check with your financial institution before disclosing any account information to third-party services, as it may void the agreement you hold with them.)

Even before you begin detailed record-keeping,  you should track your family’s spending habits for a month. “That will give you a good idea of where your money is going,” says CPA David Trahair, a financial trainer and author of several books, including The Procrastinator’s Guide to Retirement. 


Experts agree that it’s much easier to track your expenses if you use fewer methods of payment. “If you hold three or four bank accounts, five credit cards, and also pay with debit or apps such as Apple Pay, things can get out of hand very quickly,” says Sheriff.

“That’s why I would limit your options to, say, one or two personal bank accounts and one credit card. Then, once you have gained control over your payment sources, you can possibly add one or two more options. But keep it simple.”


In 2019, only 56 per cent of Canadians paid off their credit cards in full at the end of each month, says Trahair. “That means a full 44 per cent were paying the high interest that comes from carrying a balance. That is the worst financial move you can make because it means you are spending more than you bring in.”

To avoid surprises at the end of the month, Trahair advises going online to check your credit card balance every few days. “If you see by mid-month that you have already spent more than you did for the entire previous month, that’s a signal that it’s time to take control,” he says.


Studies show we’re more likely to make an impulse buy when we go cashless. So, it pays to wait before pressing “buy.” That way, you’ll not only avoid buyer’s remorse; you might end up with a better deal. As Trahair points out, “Marketers track whether you completed a transaction online. So, if you leave the checkout page without buying, they might contact you with a better deal.”


As Trahair puts it, “Many people worry about wasting $5 on a cup of coffee. Then, when their $500,000 mortgage comes up for renewal, they just accept the bank’s offer without shopping around. Yet you may be able to save thousands of dollars a year by reducing your interest rate by as little as 0.5 per cent. It doesn’t take a lot of time to compare interest rates, and by focusing on the big items, you can still enjoy your coffee guilt-free.”


If you spend a lot of time online, you’ll know the ads on social media and Google are exceptionally good at targeting people. “I don’t know how many times I’ve been searching for a product or service, then received an email advertising that same product,” he says. “They not only target you—they know what you want.”


Many people think that if they check their credit score, they might actually hurt it, says Sheriff. But that’s not actually true: in fact, many banks now offer a credit-checking feature with their online banking systems. This may come in the form of a simple button on the app. “This makes the whole process much easier,” he says. “I’d recommend checking quite often.” 


Looking for more ways to manage your finances during the pandemic—and beyond? As part of its financial literacy program, CPA Canada has developed a number of podcasts and webinars and other online tools, to help Canadians better navigate this unprecedented period.