Credit and debit cards are convenient, and dangerous, as we all know. Consumer debt is rampant. Debt consolidation companies are doing a great business. Unemployment or underemployment, paying off college tuition, it all adds up quickly, especially with the sky-high interest some credit card companies charge.
What many people don’t know is that spending cash–currency and coins–as opposed to credit or debit cards contributes to people spending less. Something in the neighborhood of 20% less.
There’s less impulse buying when you pay cash. There’s the awareness that the fifty bucks you’re going to pay for something you don’t need isn’t just numbers on a receipt or a credit card statement: it’s money, probably hard-earned.
There’s a mental hook, too: the cash money in your pocket is all the money you have to spend. Of course, unless you’re re-enacting a Jack Kerouac novel, it probably isn’t. But pretend it is, and spend less.
There’s also privacy when you pay with cash. As recent events confirm, our movements, purchases, and online searches are being constantly monitored by the government and by their corporate partners. Paying cash is an easy way to spend money on the things you want and need without providing market research information to people you don’t know.
Having cash is also handy when technology betrays us. ATM’s do malfunction. Two years ago, the computer system of a large Los Angeles grocery store chain went down. For 4 hours, only customers with cash could by food at their stores. The citizens of Greece, Spain, and Italy would strongly suggest having cash on hand, as opposed to relying on highly-leveraged banks to remain solvent.
Old Money uses cash. You should, too.