Using Cash

I have recently tried to start using cash instead of the debit card. At first it seemed like a huge inconvenience having to go to the ATM to take out cash when I could use the debit card pretty much anywhere now. If I bought a coffee, I just passed my card, if I bought gas I just passed my card.

Money management has been a huge issue for me in the past. Thankfully it has been years since I had a bounced check, but it was a very stressful situation every time I did not know how much money I had in the bank. The internet helped that a lot because I can check my balance even via phone. I have also learned to do things a lot differently than I used to.

Taking cash out has helped tons. It really hurts to see a 10 dollar bill disappear by just a single visit to the coffee house. Then I start to remember that the banks have a huge marketing machine that has made it uncool to pay with cash.

I remember a conversation I had with someone I know makes a lot of money and owns their own company with revenue in the millions. He told me a story about someone that had wanted to pay their employees just once using cash. He would give them the before take home amount, and then make them go through a series of booths where they would have to pay all of the deductions from their paycheck. I think may people, myself included, rarely check out their pay stub specially if it does not change amounts. We learn to live on take home and don’t realize what percentage of our check actually goes to all the deductions.

The first time I saw a commercial about using the check card as a credit card I thought, very cool, no more checks or cash. Now that I had time to think about it, I think it just really disconnects you from your hard earned dollars for the sake of convenience. It makes it almost painful to have to create a budget because you think having the information online is enough.

A little known fact about check cards is that they are not protected like credit cards are. If they are stolen and your bank account is wiped clean, it can take months to get that money back if you are lucky. I am not advocating the use of credit cards because I think debt is the devil, but I am advocating you try to use cash. Don’t buy into the marketing that banks have so cleverly disguised as a well choreographed dance that you will interrupt once you pull out cash.

11 Responses to Using Cash

  1. I use my card for big things, like gas (how much does $3+ a gallon suck) or the grocery store.

    But I start every week with cash in my pocket to pay for things like coffee, bottled water at work, and dining out. If it isn’t in my pocket when I need it I have probably been doing something wrong.

    I know people who use plastic for everything. I agree with your assertion that it disconnects people from how much they have and how fast the are bleeding it out.

  2. I Prefer the disconnect. Why would I want to “see” my cash leave my hand. Less pain with a card. I rarely have cash on hand, I tend to spend MORE if cash is on me. Making a conscience effort to change one’s spending habit of paper or plastic? More power to ya. And for the record I hate those Visa commercials……

  3. I HATE using checks. I hate using ATM cards, too. I prefer to use cash as much as possible for my daily things. Which usually only consists of a trip to the local coffee joint. Like you said, it hurts to see a 10 go bye-bye, but at the same time, that 10 dollar bill won’t bounce and won’t cause you penalty fees in the days and weeks to come.

  4. Very good points there. A lot of the same principles used by Dave Ramsey in his money management program. Cash is also a lot easier to budget because you can see it and when it is gone, it is gone! Good luck keeping at it.

  5. I completely disagree. I hardly use any cash and charge everything. I don’t have any balance on my cards. By trying to maximize cash back on the cards I make anywhere from $500 to $700 between all my cards (most of the time I use only 2). By using credit cards I also have benefits of being able to dispute the purchase (used it),double the warranty on most items (used it), 90 days protection (I used it when my text books were stolen in college and got my money back). I also do online banking and write less then 20 checks a year. I may go to ATM once a year. So I actually make money by using cards and since I am a grown-up a don’t have to have a bill in my hand to make a buying decision.

  6. Wookieluv, I used to think like that. I thought that if I had cash, it would burn a hole in my pocket, but it really does not. I now tend to not spend the cash until I need to… seriously give it a try for a while and you will see.

    Meesha, I mean this as a friend, you have totally bought into the marketing machine that credit cards have created… you have replied with every single one of their comebacks. After watching some educational shows about CC and being severely burned by their practices I despise them.

    Did you know that they can change their APR not by just missing one of their payments but ANY payment. It happened to me… I used to think it was so cool to have credit cards until my bank messed up my car payment… this was about some years back. I thought fixing the issue with both the bank and the car company was enough, but then all of my credit cards to raise my APR some even doubled it… when I called them they were rude and refused to lower it… I had just purchased a house at the time so I could not just close the accounts… the story keeps going, but trust me credit cards are NOT your friends.

  7. I know all the horror stories,but APR only matters if you carry a balance. I haven’t had any problems so far and I have some free cash to show for it. I booked a cruis for my Mom and got a $250 credit for using Mastercard. How much are extended warranties for every TV and game console and even my laptop – pretty good amount if you them up. No one said that they are your friend. No business is your friend.

  8. You might indeed be outsmarting a credit card company I guess… but I am very skeptical about this… almost as much as people that think they can outsmart a casino. After all I know about credit card companies, from having worked for third party collection agencies and just my personal experience I don’t think they are out there providing a service and is cool if you don’t carry a balance. Did you know that having a credit card with zero balance from month to month actually hurts your credit score?

  9. My understanding is that maintaining more than two credit cards with a zero balance hurts your credit, but so does having more than two credit cards period. I’ve personally been on both sides of the credit story. I’ve been gouged by MBNA back when I was a stupid college student. I also put about $10,000 onto a Visa (debt incurred from a wedding and honeymoon), then transferred it over to a Discover card that had a 0% rate for twelve months. Paid it off in ten months without paying a dime in fees. Credit card companies make their money through fees and leverage. Keep yourself on the right side of the leverage and you’ll be fine. Get into an auto accident or develop a chronic injury, and your banker buddies will be right there ready with a knife to put in your back. Caveat emptor and all that good stuff.

  10. I seldom carry cash. Of course I see my balance on my bank account many times a day. I usually keep a few dollars in my wallet for simple things but at gas stations etc, I’d rather use a card, thus saving me having to prepay or go inside where I’ll be tempted by fancy coffee etc.

  11. I don’t use Credit Cards…I used Debit Cards.
    =D

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