I stopped carrying cash! I stopped for one very simple reason, I would spend it. Nine (9) percent of people do not carry any cash at all! Have we finally become a cashless society? Most people prefer credit or debit cards to actually using cash. It may the reason Apple has developed their Apple Pay payment system. Although there are still cash only retailers, will mobile payments replace cash?
There are countries considering changing their currency replacing low denomination notes with coin and dropping or changing other coins. There is a long standing debate about the cent in the United States whether it should be dropped or changed. Coin is a problem to count in bulk and lost a lot of its value. The nickel candy bar is extinct! Candy bars are smaller or more expensive than it used to be. This is true regarding our purchasing power too!
I did not stop carrying cash because of decreased purchasing power. I stopped because I spend cash because there is no accountability. I know I could use my debit card, but I prefer to just not spend money. I avoid shopping at the mall or online unless I need something. Besides, I have to go to the ATM (automated teller machine) to get cash which is very inconvenient. I live a cashless existence and it actually saves me money. I use the inconvenience to maintain fiscal discipline.
Does my cash avoidance mean my spending is out of control? I know many people like cash as a method to keep from overspending, but it never worked for me. I never spend more than I earn, but I did waste cash on drinks, candy, cookies and gum. I stopped those habits many years ago. By not spending cash, I am a better planner. I think much more about my purchases. I do not impulse buy! If I go to a cash only store, I have to plan my cash by stopping by an ATM on the way.
In certain societies, carrying a lot of cash indicates wealth or is it more indicative of an underground economy. When I owned a cash business, I carried more cash. Although I used an armored transport service for my deposits three (3) times a week, I needed counter change every day. I no longer have this cash business and no longer require cash on a daily basis. Credit or debit card access probably would have increased my sales. Things have changed!
Some people who do not carry cash are living from paycheck to paycheck. They are broke! No savings, no retirement savings or emergency fund and they often borrow money from friends. They may be the same people who dress or live very well, but never have cash for the little things in life. They go out with their friends and mooch money! I had to plan cash when I needed it, but it wasn’t because I did not have the funds.
When I bought my lunch, I used to save my change in a jar. At the end of a month, I had an additional $40-50 dollars. I stopped doing that in the early 1970’s so it was worth considerably more too! I was spending close to $200 a month on lunches which was a waste of money. I stopped doing that by taking my lunch to work. My savings suddenly jumped from $40-50 to $200 and was on my way to financial independence. It is much easier to spend cash (for me) and I was less accountable for it.
I had more of my money working and less wasted on frivolous expenses. It is probably the reason; I do not buy coffees every morning or pick up breakfast on the way to work. Which came first, discipline or giving up cash? I think discipline was always there, but I was a little lax when it came to cash. I started saving when I was about seven (7) years old and never stopped. At times, I wonder if I can switch to spending when I retire. I think it will take time, but I will find a way.
Do you carry cash? Is it just for the necessities or do you waste a lot of cash? If you do not carry cash, do you use credit and debit cards for all your purchases? Does it help you control your spending? I think more about how I spend my money because I only use credit cards. Do you? We are finally moving to a cashless society thanks to technology. Is it a good or bad thing? Will the Apple Pay system change society like iTunes or not? I stopped carrying cash and I manage my money much better.
Photo by: Flickr
Money Beagle says
We carry a bit of cash for small purchases (a $2 newspaper) or for places that don’t take cash (a nearby ice cream stand). other than that I usually pay with a card as it’s easier to track the spending.
If I go to cash only places, I need to plan for it. It is a great way to not spend money!
I carry a small amount of cash but I usually use my credit card to pay for things to take advantage of the cash rewards.
If treat my credit cards like debit cards so I only spend money that I have. This is a good way to manage my money.
I agree! In fact I avoid shopping in general. When I do, I sue a list to keep me organized.
A lot of places do not take credit cards in SF. Gee I wonder if they are avoiding taxes…undoubtably.
There are benefits of both credit cards and cash, and it comes down to self control at the end of the day. Someone could burn through all their cash or burn through their credit limit. Neither are good!
Credit cards are way more convenient and my payment of preference, esp. because we can earn rewards points! 🙂
I agree. I earn miles via credit cards. Cash is much easier to spend for me, no accountability. When I go to cash only places, I need to do a little planning which is good anyway.
Michael | The Student Loan Sherpa says
I carry cash, but only for the rare cases that I cannot use my credit card. I like the buyer protections that come with a credit card, such as extended warranties, and I like having a record of my purchases. The rewards are a nice perk too.
I agree! I think more about my purchases when I use my credit card vs. cash.