Over the last couple weeks, I’ve been writing and trying out an experiment in only using cash. It’s been years since cash was my primary payment method. Because of the transition to a cash-only lifestyle, there have been some hiccups, inconveniences, and problems. Generally, cash feels cumbersome, difficult, and challenging to use. As a budding minimalist, a slim, little credit card seems far easier. But today, I wanted to recognize the money-saving advantages of cash.
1. Cash Is Concrete
It’s hard to deny that handing over cash is a painful process. Purchases necessitate hard-earned money disappearing before your eyes. The concreteness of cash makes it bigger than a random set of numbers in my online, digital bank account.
Removing cash out of an ATM seems like an old-fashioned and foreign act to me. Comically, I feel out of place punching in my pin. But afterwards, the cash spits out and I carry it around, feeling the bills in my pocket. They slosh around and are cumbersome, but they’re real, and that’s the point. This reality of concrete cash may be key to saving money.
2. Cash Slows You Down
Sometimes, I’ve hated this part of switching to cash. It seems awkwardly slow. For people waiting behind me in lines, I feel slow as I dumbly reach for the right denominations and then the clerk needs to fish for the correct change. The process takes more time, but as I reflect on using cash, maybe that’s a good thing?
Cash is more challenging to pay with, but it forces the purchaser to spend more time thinking about the transaction. Do I really need this rash, rush purchase? Slowing down helps aid in the decision-making process and make frugal choices. Suddenly, by slowing down and reaching for cash, I became more mindful of what, how, and where I was spending.
3. The Coin-Operated World
Maybe it’s not an everyday occurrence to venture off to vending machines and laundromats, but it’s important to recognize that there’s an entire economy based in cash/coin. Every couple weeks I venture off to my local laundromat and plop down a surprising number of quarters (after exchanging bigger bills) on a few loads of wash.
Perhaps this isn’t an advantage, though. Cash is the only option. Credit and debit cards don’t work in this world – nor are there ATMs nearby. Having some cash is more than a choice – it’s a necessity.
4. Gas Stations Respect Cash
Gas stations are one of the few remaining bastions for cash. Interestingly, gas stations tend to offer cash-based transaction discounts that can be worth the switch. For some reason, consumers are known for using cash quite regularly at gas stations, too.
Saving a bit off the sticker price at the pump can go a long way over time. The advantage can become a little degraded by high-reward credit cards that give bonus points for gas purchases. In that case, cash doesn’t save you much more.
5. My Budget Doesn’t Surprise Me
This is my favorite part. When I look at my Mint.com account, I see a basic budget – total savings and debt. The debt is a subtraction and weight to my budget, and it updates frequently with a newer, lower number. Unfortunately, that information is delayed and often needs to be updated before becoming interpretable.
Meanwhile, cash is always accurate and reflects the exact amount you have. In the wed design and coding world it’s called WYSIWYG (What You See Is What You Get); or, what I like to call, “What You See Is What You Have (WYSIWYH). When I look at my wallet or bank account, I know exactly how much money I have. This fluctuation changes instantly – no syncing required. Ultimately, using cash gives me a surprisingly powerful peace of mind.
#5 is super valuable when you’re trying to budget for a household. My wife and I don’t always talk about what we’ve spent.
I agree with Jason. I would see #5 as the real advantage. You can keep tabs easily on how your spending for the week or month is going. Big fat thick envelope = plenty to spend (or save!). Thin emaciated envelope = woah nelly! Lay off the spending!
I have lately been buying using cash only as self-experiment to see if there will be significant changes for the better in my finances. If I don’t have the money to buy for something that I want or need for the moment, I try to wait until my next money is available. You know why? I am heeding the words of a self-made man who said “if you cannot afford to buy it in cash, you cannot afford it”.
Wow, great post AND great comments so far. I find more and more that the “old school” approach to things is becoming more and more attractive to people. Perhaps technology has gone just a bit too far for human comfort. Anyhoo, glad to hear that you’re still working the cash angle, Sam! Best wishes to you on that. I can tell you that very soon not only will you be out debt, but you will have an abundant savings account to boot! We found that when you put the first 10% (plus) toward Charity and the second 10% (plus is optional but great if you can do it on this one) toward savings, the snowball effect is amazing! 🙂
I like cash too. We just spend less when we use cash instead of credit. It sounds hokey, but it’s real for us. It’s way too easy to swipe a credit card.
Paying with cash makes me more conscious of my spending and I tend to be more frugal with my money than I am when I am using my credit card. That isn’t to say I spend frivolously with my credit card, but seeing the cash slowly dwindle down does make you more conscious of what you are buying.