Sign On
  • Online Banking
    Sign On Form is Loading

The temptation to spend your hard-earned cash is everywhere, from clearance sales and alerts for megadeals in your inbox to promotions at the trendiest restaurants in town. So how can you stick to your budget?

Here's a simple trick: It turns out that carrying around bills in large denominations can help you spend less. That's right, we're talking about the Benjamins.

Backed by research, here's why carrying bigger bills is one of our favorite tried-and-true money saving methods.

The Denomination Effect

A study in the Journal of Consumer Research revealed that the size of your bills influences how inclined you are to spend them. The smaller the denomination, the more likely you'll be to spend the bill. For instance, you're more likely to spend 20 $1 bills than break a single $20 bill.

Why is that? Well, it could be that we tend to view larger bills as more valuable and thus are more careful with how we spend them. Conversely, we think of smaller bills as less valuable and part with them more freely. It's far easier to part with a $5 dollar bill than with a $20.

The same goes when you're making a purchase. You're more likely to buy 10 items that each cost $1 than a single item that costs $10, even though you end up spending the same amount of money. And that's why it's so easy to shell out far more money than you wanted to when buying lower-cost items, a phenomenon called nickel-and-diming.

This happens partly because of mental accounting, where we irrationally separate our money based on criteria such as where it came from and how we plan on using it. So while larger bills may be designated for special purchases, the same amount in smaller bills may be easily spent on frivolous things.

Cash Over Credit

Take a break from using your digital wallet and use cash instead. An MIT professor studying the psychology of money discovered that during a silent auction for basketball tickets, those who planned to use a credit card bid nearly twice as much as those with cash did.

That's because credit cards disconnect the pleasure of buying from the pain of paying. So when you use a credit card, you're in a state of momentary bliss — until the credit card bill arrives. By using cash, especially large bills, you stay in tune with both the pleasant and the painful parts of making a purchase and will therefore think twice before spending that hard-earned money.

Minimizing Your Credit Card Debt

If you have trouble paying off your credit card balance or have been burned by credit card debt in the past, use cash instead. While using a credit card can sometimes help you as a consumer, misuse can hurt you. Knowing common myths about credit cards can keep you from making a costly mistake. And because it's so easy to reach for the plastic — and overspend when using credit — use bigger denominations to stick to your budget. The larger the bills, the longer you'll think before you spend.

Next time you're out and about, try carrying just the amount of money you need in the form of bigger bills. Remember: If you don't have it, you can't spend it.

This information and recommendations contained herein is compiled from sources deemed reliable, but is not represented to be accurate or complete. In providing this information, neither KeyBank nor its affiliates are acting as your agent or is offering any tax, accounting, or legal advice.

By selecting any external link on, you will leave the KeyBank website and jump to an unaffiliated third party website that may offer a different privacy policy and level of security. The third party is responsible for website content and system availability. KeyBank does not offer, endorse, recommend, or guarantee any product or service available on that entity's website.

Call Us

1-800-KEY2YOU® (539-2968)

Clients using a TDD/TTY device:

Clients using a relay service:

Schedule an Appointment

Talk to a Branch Manager in your neighborhood.

Schedule an appointment now

Find a Branch or ATM