10 Reasons to Pay with Cash

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In a tap-and-go world, it seems rare for people to pay with cash these days. However, there are plenty of reasons why you might want to go back to using good, old-fashioned cash. Here are 10 reasons why I love to pay with cash.

10 reasons to pay with cash

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10 Reasons to Pay With Cash

1. Emergency Preparedness

2. It’s not traceable

3. Cash doesn’t cost merchants money (which saves you money)

4. Cash is simpler

5. We spend less with cash

6. Cash is Finite

7. You become a more conscious spender

8. You’re literally voting with your dollars.

9. It’s (almost) impossible to go into debt when you use cash

10. Using cash sets a good example for kids

1. Emergency Preparedness

Having cash on hand is a key component of living a preparedness lifestyle. When the power goes out, so does the internet. That means you won’t be able to pay with a card.

If you are used to living a cash-based life, you’ll always have cash on you, and you won’t be stuck without a way to pay for things in an emergency situation.

I know many people who carry zero cash, and I could never do that – I always feel better having at least some cash on hand. Even if you don’t go cash only, this is a great reason to always carry at least some cash with you.

(Want more emergency preparedness tips? Here is one of my favourite books on the subject).

2. It’s not traceable

Have you considered the fact that when you spend money electronically, you’re essentially leaving a digital trail of every purchase you make?

If someone really wanted to, they could find out an awful lot about you if they had access to your checking account or your credit card statement.

Now, you may not have anything to hide, but why would you want someone to know that much about your life?

I personally love the anonymity that cash provides. I don’t buy anything illegal, but I also don’t want a paper trail for every purchase I make.

It’s also one of the reason I gave up rewards/points cards. Someone else has a record of every single purchase you’ve ever made with that company. What are they doing with that data? Have you read the fine print? Is it worth it for the minuscule ‘free’ points? (Hint: nothing is free. You’re paying for those freebies in increased costs passed onto the consumer).

3. Cash doesn’t cost merchants money (which saves you money)

When you use plastic, whether it’s credit or debit, merchants have to pay a transaction fee for every purchase you make. As a result, they have to increase their prices in order to accommodate their fees. If more of us made a conscious choice to use cash rather than plastic, we could collectively help to lower the cost of the products we purchase. Some merchants will even offer you a discount if you use cash.

I’m particularly mindful of this with small, local businesses (which is where I prefer to shop). Their profit margin is tight enough as it is, so I do my very best to ensure that I am paying with cash.

4. Cash is simpler

I’m all about simplifying my life in as many ways as possible. Paying with cash is one of those things. It feels old-fashioned. There are less transactions to reconcile in my bank account.

Some people like to use the envelope method – where they divide their cash into actual envelopes (or something similar), based on its intended purchase. So they would make a withdrawal on pay day, and put a certain amount in their grocery envelope, some in their gas envelope, some in their clothing envelope, etc.

This helps you to keep control of your spending, and not go over budget in those categories.

I do something similar, but instead of using actual envelopes (which would get cumbersome, especially when dealing with coins), we use an app. We effectively have a digital envelope system, which allows us to allot a certain amount of money in each category without having to divide it up into physical envelopes.

(Note that we no longer use Mvelopes, the app mentioned in the link above – instead we use an app called YNAB, which I love SO MUCH MORE, and I’ll be updating that post soon). That’s a referral link. If you want to give it a try, you can get a free 34 day trial!

5. We spend less when we pay with cash

Do you know there are actual studies showing that we spend less when we use cash vs. plastic? And plastic doesn’t just mean credit cards. It means debit cards, too.

When’s the last time you swiped your card without even paying attention to the transaction total? (I know that used to happen all to often for me… 2 minutes later, I couldn’t tell you what that thing I bought cost).

Paying with cash causes emotional pain, because the cash physically leaves your possession. You can see your pile of bills getting smaller.

When I spend actual cash, the act of counting out the dollars and cents actually registers. I could tell you, to the penny, what I spent on that item.

(Ok, we literally do not have pennies in Canada any more – but you get my drift).

6. Cash is Finite

When you take out a certain amount of cash from the bank, it’s finite. There may be more money in your bank account, but it’s probably allocated to other things. Important things, like bills.

Seeing your pile of dollars shrink as you spend it, makes you more mindful of how much you have left. You start to reign in your spending as your pile gets smaller (even if you have more money in your account you could pull out, the inconvenience of going to the bank to get some is enough to slow down your spending).

7. You become a more conscious spender

When I’m paying with actual cash, I’m much more mindful about how much things cost. I’m more likely to look for a better deal. I’m more likely to try to find something second hand, because I can do so for a fraction of the cost.

When using a credit or debit card, it’s so convenient to swipe the card that we tend not to worry so much about what it’s costing.

8. When you pay with cash, you’re literally voting with your dollars.

I don’t know about you, but I can see how swiftly we are moving toward a cashless society.

The more everyone mindlessly swipes, the easier it is to convince us that going cashless is for our own good.

Personally, I feel the government has enough control over our lives without giving them the opportunity to control the money we have access to. There are way more downsides to going cashless than there are upsides.

I literally vote with my dollars by handing over bills and coins when I make purchases. I’m telling the merchant that this is my preferred payment method.

If enough of us do it, cash won’t be going anywhere.

9. It’s (almost) impossible to go into debt when you pay with cash

Have you noticed a considerable increase in consumer debt compared to just a generation ago?

When people used to ONLY spend money they physically had, it was impossible to go into debt.

I may be aging myself here, but I remember when most people didn’t have a credit card, and I also remember when debit cards first became available. Prior to that, there weren’t even bank machines. You had to physically walk into a bank and take out cash. You’d hand them your bankbook and they would update it with your current account balance.

If you didn’t have enough cash on you, your only other option was to write a cheque. And bouncing a cheque was pretty much the most embarrassing thing ever, so you would always make sure there was enough money in your account to cover the cheque.

You couldn’t use credit cards to buy things like groceries.

Having access to plastic drastically increases your risk of over-spending, because you can’t physically see the money dwindling (unless you’re checking your bank balance after every transaction). Even still, with the popularity of things like overdraft, you can still go into debt with a debit card.

And the ease of easy credit makes credit card debt the norm in most families. I prefer to be ‘weird’ and debt-free.

10. Using cash sets a good example for kids

Kids are tangible beings. They need to see, feel, and touch things, to understand them. If they just see mom swiping a magical card to pay for things, it’s hard for them to understand what a budget is, and that there is an actual end to the money.

When they see you handing over physical cash to pay for things, it’s easier for them to understand that when the money’s gone, it’s gone!

When we decided to start giving the kids a monthly allowance, I gave it to them in small bills and coins, so they could divide it up into jars. They had to figure out 10% to put into their ‘savings’ jar, and then could decide how they wanted to spend the rest. If they ordered something online, I would put it on my credit card, and they would count out and give me the cash. Even though it might be a digital purchase, having them count out the cash to pay for it helped make it more tangible for them.

Cash is also a great way to teach kids math skills!

Whenever we would go to the farmer’s market, I would have one of the kids keep a tally of how much we were spending. Then I’d get them to take the cash from my wallet (counting up bills and coins), and even get them to calculate how much change we should get back. This is truly becoming a lost skill in our modern tap-and-go world.

11. Cash requires you to plan ahead

Ok, I know I titled this post ’10 Reasons to Pay With Cash’, but I thought of another one, and it’s too important to leave out.

Paying with cash requires you to plan ahead.

This drastically helps reduce impulse purchases. If you’ve only taken out a certain amount of money for the week, and you see some shiny thing you really, really want – it causes you to pause and think. Is it worth going back to the bank to take out more cash to buy the thing? Is the thing in the budget, or is it just something you really, really want right now?

Paying with cash requires PLANNING. Plastic does not. If you see a shiny thing, it’s so easy to swipe that card and get it.

Cash is so much more intentional, because you have to plan ahead, go to the bank, and make sure you have enough money on you to pay for your planned purchases.

There are a few downsides to paying with cash

I know that at least a few of you will be quick to point out the downsides of using cash. However, I find that the positives far outweigh the negatives. I’ll list them anyway, for illustration purposes.

1. Loss/Theft

Some people might worry that they could lose their cash, or it could get stolen. The truth is, so few people carry cash now, that unless you have a see-through purse, no one knows that you have it, or how much.

And truthfully, when you know you’re carrying cash, you tend to hold onto your purse or wallet a little tighter. You’re more mindful of where it is at all times. And that is not a bad thing.

You also don’t have to carry ALL your cash at once. Take out a certain amount each week. Or take out an amount for the whole month (I find it easier to budget a month at a time), but leave most of it in a safe place and only put in your wallet what you’ll need that day.

2. Online Purchases

There are still times we may need to use a credit card, such as for online purchases.

Back in the Sears Catalogue days, you could do something called a COD (‘Cash On Delivery’). That meant they deliver the goods, and you would pay for them when you got them.

Unfortunately I don’t even think that is a thing any more, so we do use a credit card when purchasing online. Then pay the bill in full each month. We don’t use credit as ‘credit’, because we do have the cash to pay for it, we just can’t use physical cash.

3. Bill Payments

Most of us pay our bills online, which is easy to continue to do.

Just take out cash for the transactions you will make in person.

4. No ‘Rewards’

I know a lot of people REALLY love their credit card rewards, which is why they prefer to use credit cards. But I strongly believe that there is no such thing as ‘free’. Your rewards are earned through the fees your merchants have to pay on your transactions (which come back to you in the cost of higher prices), things like annual fees, and interest if you carry a balance from month to month.

There truly is no such thing as a free lunch, and you’re actually paying for those rewards (while lining the credit card companies’ pockets at the same time). While also spending more because you’re tricking yourself into believing the more you spend, the more ‘free’ stuff you’ll get.

There is a reason why credit card companies are rich.

So many reasons to pay with cash

For all of the above reasons (and more!) I absolutely love to pay with cash for in-person transactions.

I love the ease, the simplicity, and frankly, even the ‘weirdness’ of pulling cash out of my wallet to pay for things. I’ve actually had people say to me ‘wow, I never see anyone use cash any more’.

I believe in living intentionally with all things in life, and our method of payment is no exception. It’s important to think through WHY we are doing what we do, and if there might be a better way.

Do you love to pay with cash? Share your thoughts in the comments!

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