Does physical cash hurt or help your financial goals?
For me, personally, cash is more of a hinderance than a tool.
- If you use physical cash you miss out on potential travel rewards, cash back, and other perks.
This only makes sense if you NEVER carry a balance and always pay your cards off on time.
- Cash has a tendency to be spent.
This might only be for finance nerds who check their account balances everyday, but I HATE seeing my account balance decrease. If I use physical cash to buy something, the numbers in my account don’t move!
- Cash makes splitting costs difficult.
We’ve all been there when the total for lunch is something like $26... who the hell is carrying around $13 in cash? Using a cash transfer app makes everything a whole lot easier.
- Coins (Don’t even get me started)
As a guy in my 20s who carries only a small wallet, I’m not too prone to carry coins. I’m sure most of you guys reading can agree.
Even as a woman, digging coins out of your purse is far from optimal!
Cash does serve some purpose!
I understand that living a cashless life isn’t for everyone, here are some of the circumstances where I think it’s okay to carry cash.
- Strict budgeting
If you know that the only way you can effectively budget is with a cash envelope system, then do it. If seeing your bank account balance decrease doesn’t make you cringe (or you don’t check), then this is definitley a viable method.
- To Avoid Fees
If there is a 3% fee on a large purchase for using a card, then OF COURSE it’s better to use cash or a check. I’m certainly not advocating for bad money habits.
- At cash-only venues
There are still some old school restaurants and stores that only accept cash. If this is the case, make sure you are retrieving that cash in a smart way (e.g. Using a checking account that reimburses ATM Fees)
What are your thoughts on cash?
Submitted January 18, 2019 at 07:16AM by Fly-to-FI http://bit.ly/2FAXzRA
