The Benefits of Cash In A World of Plastic
It’s only a matter of time before cash as we know it is gone, replaced by credits, plastic, or existing virtual currencies such as bitcoin.
In the meantime, there are benefits of cash that make it far superior to any of those aforementioned options. You simply need to know when to use it, and recognize convenience when it’s in front of you. Cash allows you to budget monthly expenses quickly and easily, because the things you spend that cash on is predetermined. Cash is untraceable, despitewhat the FBI and CIA would have you believe. They’re not putting OrangeGlo on your bills to see if you’re paying taxes on the Honda Civic you just bought on Craigslist. The Visa slogan “Accepted Everywhere” isn’t accurate in the slightest. You know what is accepted everywhere? Cold, hard cash. On that note, there is hardly a soul in the world that wouldn’t accept an American hundred if you were in a pinch. Taxi drivers in Thailand know exactly what Ben Frank’s face means, and they’ll take you where you need to go. Getting back on topic: In a world of split checks combined with wait staff that can’t do simple math, be the hero of the group and throw down a Jackson after your next company meal. People will be like “Woah, that guy can just get up and walk out, without waiting to sign a damn thing.”
Here's a time tested (perhaps dated is a better term) method of utilizing cash: budgeting. If you suck at managing money the traditional way, then here is a method of using cash that can greatly benefit you. Like most budgeters, you have a solid game plan at all times, with certain amounts of money dedicated to different things for the month. But without a similarly solid method of limiting what you spend, or tracking where your money is going (boring), you end up falling short of your budgetary goals and overspending here, there, or everywhere. Modern apps for tracking where you spend money are ok, but fall short in several areas due to merchant and transaction miscategorizations (bought fuel at a gas station? The app will have you wondering where you spent $40.16 at “SUBSTANTIAL HOLDINGS LLC” which is actually the corporate name for the gas station on the corner). Money management is a futile effort if you have no idea where 10% of it is going.
Cash budgeting is simple. It’s also not a new or revolutionary idea, but it is championed by gurus such as Dave Ramsay. You plan your expenses as usual, and instead of watching where your money is going from using your bank account or debit card, set aside cash in independent envelopes for each expense. At the beginning of the month, withdraw your budget for spending on any and all things in cash. This might be rent, groceries, gasoline, child care, you name it. If you budget for it, it gets its own envelope. Using this method, and sticking to it, prevents you from overspending on any particular category in your budget. When the cash runs out, you’re done for the month. No more spending on that. It needs to be practiced cautiously ,and constant attention must be paid to how much is left to get you through the month. Even if you put cash in an envelope, if you go to Whole Foods instead of Wal-Mart for your groceries, chances are you’re going to blow your food budget on day one. Although I included it in an earlier example, certain recurring expenses like rent, utilities, bail bonds, etc. obviously don’t need a cash envelope because you only spend a set amount of money on those each month, and they rarely change. But hey, if it helps you stay consistent, do it with everything.
Using cash only can also work exceptionally well for getting out of credit card or other high interest debt. If debt is a problem you struggle with, leave your credit cards at home. This quip of financial advice has been beat harder than the deadest of dead horses, because it works. Don’t spend money you don’t have. Can’t spend money you don’t have if your means of accessing it is buried in the back yard inside a tin can and Ziploc bag. Better yet, dedicate a cash envelope to how much you’re going to pay your credit card at the end of the month. Call this the same as your “over budget” fund, and know that if you use it, it directly correlates to increasing the time it takes you pay off your debt.
Entertainment is another great topic to touch on. Specifically, I’ve got into the habit of paying cash at restaurants and bars. Why? Because it’s convenient as hell. If you’ve got a variety of bills in your wallet, you don’t need to screw around while the waitress takes four other tables’ orders before she runs your card (and the numerous people with you that all split the check). Throw down the cash, say “no change”when she grabs all the checkbooks, or even easier just walk out after putting the money on the table. This makes double sense in a packed bar. A coked up, redbull winged bartender is probably mixing six other drinks when you whip out your card and ask if they take Amex.
The bartender doesn't have time for that, but they have to make time because that’s the world we live in. Do them and yourself a favor: put down cash and leave. They thank you, and so does everyone staring you down, waiting to jump into your spot at the front of the bar. Now that I think about it, 95% of the people at the front of a bar are just waiting for their tab. The problem of bar overcrowding was probably nonexistent 30 years ago, and this might have to do with how long it takes to pay for a drink.
Although cash is convenient on a number of applications, don’t go overboard here. Firstly, cash is easier to steal than a credit card (nothing says “mug me” like paying for your drunken 7/11 hot dog with a hundred dollar bill), and similarly, if you lose it, no giant credit company is going to send you a new one in the mail and reimburse fraudulent transactions. Each method of payment has benefits and drawbacks, so consider your options when making a purchase. I can promise you, not only will it save time, it will also be appreciated in our fast paced world.