Personal Finance Spending & Saving


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    Dirty Money Spends Faster

    If you’re looking for a creative way to save a couple of bucks each day, perhaps you should consider separating the crisp, new bills in your wallet from the older, more weathered ones. A recent study indicates that people spend bills that appear to be old and dirty more quickly than new money.

    The research, published in the Journal of Consumer Research, indicates that consumers spend more worn bills than they do crisp, new bills. The research also found that people are more willing to break large bills when they appeared to be worn out.

    From the study:

    People want to rid themselves of worn currency because they are disgusted by the contamination from others… [but they] put a premium on crisp currency because they take pride in owning bills that can be spent around others.

    The researchers suggest that the phenomenon is driven by consumers’ desire to pass along clean bills, which they subconsciously value more because of pristine appearance as well as disgust associated with money that has been handled by many people.

    They conclude, “This is important because researchers tend to regard currency as the means to consumption, not as a consumable itself. The results of this work suggest that money is subject to the same inferences and biases as the goods it procures.”

    According to the Journal, the Federal Reserve tries to take dollar bills out of circulation after about 18 months of use because of the amount of bacterial contamination the bills accrue. A $100 bill, which passes through fewer hands, can remain in circulation for about nine years.

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