Financial planner Victor Godinho said goodbye to his wallet four years ago and hasn't looked back.
The 23-year-old adviser at the VTAG Financial Group Inc. in Toronto was one of the early adopters of the "cashless" lifestyle, a move to ditch pocket change and bills in favour of plastic cards and mobile phone payments.
It's a trend that's becoming increasingly popular with consumers, and setting off alarm bells for some advisers who say it amplifies the risk for Canadians to unknowingly blow past their monthly budgets.
What makes digital transactions so dangerous, they say, is the intangible technology is attractive and easy to use, but also quick to deplete your savings.
"We're getting further away from the reality of making these purchases," said Jeff Schwartz, executive director of Consolidated Credit Counseling Services.
"Literally, you could be working out on a treadmill, looking at your smartphone, and press one button to buy an item. It shows up at your door a day later."
Not so long ago, wallets and change purses were a handy barometer of your bank account. You'd take $100 out and, when it disappeared, the void would trigger a subconscious warning to pump the brake on your spending habits.
Those days are quickly fading as retailers and payment processors aggressively roll out new digital technologies, from online shopping to tap payments at cash registers.
PayPal, the global online payments processor, has backed several online surveys conducted by Nielsen on behalf of the company that show that Canadians are eager to adopt new digital payment methods. A recent poll showed that 45% of 1,504 Canadians surveyed said they were ready to adopt emerging technologies — wearable devices like smartwatches — to make mobile payments.
Findings like that concern Harley Lockhart, an adviser who runs a practice in Kelowna, B.C. and chairs Advocis, the Financial Advisors Association of Canada.
"Tapping is probably worse than when we used to have to sign a credit card receipt," he said. "It's such an insignificant action."
Canadians should use cash whenever they can, he suggested. Shoppers also need to carefully monitor their credit card spending habits and cancel any cards they can't afford to pay, even if it's only a month overdue.
Other advisers say consumers should take a more active approach to fend off the onslaught of digital conveniences.
