Venti Americano? Why not. Two-day shipping? Gotta have it. Ad-free version of that app? Of course! All these nice little extras are hard to pass up, especially when you can pay for them instantly without really thinking, as you tap on your phone or go straight to “one-click” shopping. Result: Starbucks and Co. have become significant line items on many a monthly budget, and I’m willing to bet on yours, too.

A Dun & Bradstreet study found that people spend 12% to 18% more, on average, when paying with a credit card. That’s on average. We suspect that for young people the overage could be double this — 24% to 36% more — especially if they’re paying with their phones – no need to even pull out a credit card.

Do Payment Mechanisms Change the Way Consumers Perceive Products? This was the topic of recent research by University of South Carolina professor Randall Rose. The finding? Definitely yes. When paying by credit, consumers tend to focus more on the benefits and less on the costs (and vice versa).

Surplus Spending Could be Surplus Savings

“Surplus spending” comes easy for Gen Y and younger because we’ve never had to use mostly cash to buy things. Cash makes spending more real and slows things down. Today, electronic payment systems are so common that cashiers actually seem startled when I sometimes try to pay with exact change instead of a QR code on a touchscreen. Even the game Monopoly has stopped using cash!

As kids tap on a screen or swipe a credit, all purchases can end up being impulse buys. There’s little time to think: Is this something I need…or is this something I want?

How do you help kids limit surplus spending? LNWM’s NextGen Money Group recommends you turn to the old adage learned during fire drills in Elementary School – Stop, Drop, and Roll!

More specifically, make kids aware of their buying behavior by advising them to:

1. Stop rushing! Before swiping, tapping or clicking, ask yourself: Do I really need this? Set a dollar limit, like $100, for purchases or events that you’ll think about in advance, for at least a couple of days.
2. Drop your price point for every day purchases. Why keep spending $4.25 for morning coffee?
3. Roll the cost of what you’re buying into an easy-to-follow budget. You can make a budget in five minutes or less using free apps and online resources like: www.mint.com.

Kids who “Stop, Drop and Roll” will probably pretty quickly realize where their money is going. As they get a grip on surplus spending, they’ll then start to see surplus savings, which they can use to buy the things they really need and care about — or to invest, which we also teach kids to do at the LWNM NextGen Money workshops.