13/11/2015 5:48 AM AEDT | Updated 15/07/2016 12:51 PM AEST

Cash Or Card: Which Do We Spend More On?

Kommersant Photo/Getty Images
VORONEZH, RUSSIA - JULY 25: Man holding a Russian credit card of Sberbank in his hand on July 25, 2015 in Voronezh, Russia. (Photo by Oleg Kharseev/Kommersant Photo via Getty Images)

Spending money is easy. Especially when all the transaction requires is a "tap and go" action of your wrist. But when it comes to cash or card -- is there one method that has us spending more than the other?

If you asked older generations, they’d have an answer for you instantly -- card, of course -- with some going as far to say it is mindless spending. After all, you seldom need a PIN anymore (unless the purchase is over $100).

A fair argument, considering recent statistics point to Australia being a nation that spends beyond their means with the worst offenders being young people.

However, on the other side of the fence there is the argument that with card, you can track your spending far easier without having to keep track of every single receipt.

“Using a debit card is your best bet for smart spending,” Sarah Riegelhuth, director of Wealth Enhancers told The Huffington Post Australia.

After all, how often are people nowadays withdrawing their month’s salary in cash?

“Of course, it depends on your personal spending but in general, using a debit card is the easiest way to track what you are spending -- thanks to the ability to check your account on your smartphone and with the help of some great apps,” Riegelhuth said.

Riegelhuth warns you will inevitably spend more on a credit card however, simply because it is harder to track -- so while a debit card is recommended -- steer away from credit.

“When I was using a credit card -- even though I would pay it off in full at the end of the month -- I found that I was spending 30 percent more,” Riegelhuth said.

Obu Ramaraj, director of Smart Money Solutions agrees.

“Unless you are super disciplined, credit cards are not for your benefit,” Ramaraj told The Huffington Post Australia.

When it comes to cash in your pocket though, it can too be your friend or foe -- if you are a spender -- you will spend regardless. And, the same goes for card.

“What is actually in the bank can be very different to what you 'think' is in the bank -- plus, banks make it easier for us to overdraw by providing 'overdraft' -- which we then end up paying interest on,” Ramaraj said.

Ramaraj recommends withdrawing "spending money" as a strategy to work out spending habits -- which will then help you set an achievable budget.

Both Ramaraj and Riegelhuth agree making use of multiple bank accounts is a great way to manage your money effectively.

“A separate account for savings, bills and everyday spending is a good idea,” Riegelhuth said.

You will then forecast the various expenses ahead of time, for example, if you know your car registration is due in five months’ -- you will ensure there is enough money in your “bills” account so you won’t run into trouble once it is due.

This also avoids the disappointment of having to pull money out of your savings.

“It’s good practice to be checking your spending on a day-to-day basis and even better to be sitting down once a month to evaluate your spending taking into account things like a pay rise,” Riegelhuth said.