I’ve been trying to spend more cash (not more money, though!) as opposed to using credit cards for purchases lately. Although I would not consider myself a “cash only convert”, I do find it helps me keep within my desired spending limits, to a certain degree.
Especially with discretionary spending- or allowance or fun money-whatever you call it- which is primarily what I have been using a cash only system for, it keeps me from having to keep track of how many times I used my card in a given week and how much I spent in total, which is one less thing I have to worry about. I also find it makes me think a little more about what I spend money on-knowing that when I run out of cash on hand, my spending will be limited to items that are budgeted in some fashion.
Benefits of Going Cash Only
- You don’t have to worry about lots of small expenditures “sneaking up on you”-Keeping track of cash is not too hard-it is usually on your person, and when you run out, that is it.
- It may make you think a little more carefully about what you spend your money on-This has happened for me, even with my “fun money”, so I am sure it would for other expenditures as well if went to an all cash system.
- No chance of interest or late fees or penalties- I suppose if you took out a loan for your cash, you may pay interest, but in general, you don’t have to give a 2nd thought about being late on your credit card bill.
- Cash can actually be convenient- I don’t care what the commercials for Visa debit try to say, having someone (or multiple people) in front of you pull out a debit or credit card for a $1.25 purchase can be slow and aggravating-although I have done it myself plenty of times. Splitting a lunch bill usually works out better when all of the parties have cash as well.
- It is accepted universally- Cash is desirable by most people, and you hardly ever have to worry about whether someone accepts cash as payment. In fact in many non-retail establishments or personal transactions, cash is not only preferred, but required.
But there are some drawbacks too:
Drawbacks of Going Cash Only
- It can be an inconvenience- especially if you try to go “all cash”, including groceries or other larger value budget items, juggling different amounts of cash can be a chore-although I have not tried it with much intensity, many people swear by the envelope budgeting system as a solution.
- Less security and protection for loss or theft- If you lose a big wad of cash, unfortunately, in this day and age, the odds are you will never see it again. Credit cards, on the other hand, almost all provide some protection against liability in the case of loss or theft, although it certainly may be a hassle.
- No chance for earning rewards- I am not a huge proponent of using credit cards strictly for rewards, like cash back or airline miles, but some people can rack up quite a bit by using their credit cards for the majority of their purchases.
- It can limit your freedom with spending- If you only have $29 in cash left, and you need $30 to buy something, you are basically out of luck. Now that $1 may not hurt you in any way monetarily, but if you stick to the system, you will be unable to make the purchase.
What are your thoughts on going cash only- even if just for fun money? What are some other pros and cons to going cash only that I have missed?
photo credit: The Ninja Monkey
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“It can limit your freedom with spending- If you only have $29 in cash left, and you need $30 to buy something, you are basically out of luck. Now that $1 may not hurt you in any way monetarily, but if you stick to the system, you will be unable to make the purchase.”
Actually, at my house it would be worse than this. We’d go ahead and spend the $30 from the debit card, and still have the $29 in cash. I suspect that happens to a lot of folks who try to go to a Cash Only method.
I refuse to go cash only because of the reasons you mentioned above. I used to work at a bank as a teller and I abhor touching cash.
Plus, I can get rewards for using my credit card so why not?
I applaud your effort to go cash only….good luck.
@Momma- I’ve done that quite a few times myself! In fact, I think I have actually done it more than not buying something, which kind of defeats the purpose.
I agree with all the benefits you listed.
Regarding drawbacks – for large purchases, instead of carrying cash, you can simply write a check. That way you arn’t in danger of carrying around large wads. As for the earning rewards stuff – do people really earn that much from their credit card rewards? I’m pretty sure it’s trivial amounts, and you have to spend tons to make it worth it i.e. spend money you haven’t got.
I make lots of purchases online using Paypal (usually out of small bits of online earnings writing articles etc, for which I am paid via Paypal). I’ve also got into the habit of saving earnings from doing surveys and taking them as Amazon vouchers at Christmas time – and then I do my Christmas shopping on Amazon in bulk. When I shop online I always go through those cashback sites (Quidco etc), which means I get something back on the purchase that I’m making with vouchers or Paypal money. There are endless ways of getting things without using the credit card if you are imaginative.
@lulugal- Sorry for the delayed response- Although I have never worked at a bank, I do think about how dirty money is from time to time! I don’t think I will be going cash only for a lot of things, but it does work pretty good for my “fun money”.
Actually, cash isn’t accepted universally. You can’t make a hotel or plane reservation without a credit or debit card.
Yesterday a speaker on NPR remarked that in addition to getting rid of the cash and “points” kickbacks and charging everyone annual fees as strategies to zing customers in the aftermath of the new fair credit-card law, credit card issuers probably will start charging for paper statements. As soon as any of those things happen, my credit cards go. I guess I can use a debit card to buy gas and for the rare occasions that I travel.
I dislike using cash, not only because it’s filthy but because there’s really no way of keeping close track of where it gets spent. On the other hand, the same NPR guest described in detail exactly how exploitive credit card lenders are…it’s a nasty business that one really ought not to support in any way.
i use cash for every thing its been around for over 5000 years and its not going no where !
It is not impossible to book a flight or a hotel room without a debit card or credit card. I have worked the front desk at The Hilton for six years now, and I can tell you that to this day we have people come in without plastic. Checks can be used for any type of deposit or reserve for incidentals which is the reason the hotel requires the card in the first place. As far as airlines go you can provide your banking account number online to pay for your ticket like a transfer or just go to a vendor of airline tickets if you have the time. I have not had a credit card since I was in college and travel frequently. With the exception of getting a rental car with ease, I have never in my life been turned down for anything with anywhere I have ever traveled. The rental car biz has a lot of red tape and you usually have to find one that will accept cash or some other form of reserve. Talk to them, you may be surprised what they are wiling to work with you on.
What is with so many people worrying about cash being dirty? I lick my fingers everytime after I handle my cash, and I’m fine. It’s tasty and I love it. Your toothbrush probably has more germs on it and you put that in your mouth every day. For those who aren’t convinced, cash can be handled with latex gloves at first, then you can go home and run it through the washing machine, and then iron it before you handle it with bare skin, so now you wont get a dirty disease and die.
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