Cash is a time-honored way to pay for goods and services. It has a set value that users and vendors recognize easily. Since the invention of the first coins, throughout history, people with cash could buy as many products as their total cash assets allowed. Using cash can help you save money by being more aware of the value you get from letting it leave your hands.
Cash Budgeting Advantages
Bankrate suggests that you create a budget and use cash to stick to it. When you compare your cash income and your budgeted outflow, it's easier to see how much cash you need for each budget item. With cash, you can put the proper amount into envelopes for each budget category then use them for your daily and monthly expenses.
When it's time to use your cash envelopes, you'll know exactly how you spent your money. If you underestimate or overspend, you’ll face the sobering exercise of robbing one of your budget envelopes to make up the shortfall. Avoiding the feeling of failure can be a strong motivation for realistic spending.
Cash Cuts Your Spending
Cash helps you set spending limits, stay within your budget and save money. No one wants to be the person holding up the checkout line at the supermarket because they let random things jump into the grocery cart. When you use cash for shopping, you tend to disregard tantalizing specials and sales on things that aren’t in your spending plan. Because you didn't bring money to pay for them, you’ll be forced to choose what to buy and what to leave behind.
Accepted Almost Everywhere
Almost all merchants and vendors accept cash. This isn't always true with credit and debit cards. When you want to save money by shopping at your local flea market or a roadside produce stand, you're unlikely to be able to use plastic. In addition, if you use cash for your transactions instead of plastic, you might be able to haggle over the price and keep some of your cash in your wallet.
Salespeople who need to move a product or sell a service often don't mind giving you a discount when you offer cash. Otherwise, they are choosing to wait for a buyer, possibly with plastic that has added processing fees.
Anonymous and Secure Payment
Cash purchases are anonymous unless you want to divulge personal information, says Reader's Digest. Swiping a debit or credit card at the register exposes your financial information such as where you bank and sometimes where you live. Even when you trust the merchant that you shop with, they can’t always protect your personal data from prying eyes and identity thieves that can act fraudulently.
Fee and Debt Free
Unlike debit and credit cards, cash payments don’t have added fees tacked on. Discover reminds consumers that when you use cash, you don’t incur a debt that has to be paid at some date in the future. Since cash helps you nix debt, you also won’t pay interest on your purchases.
Cash Purchases Increase Worth
CNBC notes that studies show spending real cash is more emotionally painful than swiping a card. You see your funds being depleted with every transaction. As your wallet gets lighter, you'll focus more on what you’re buying and how much it’s worth. Even when you leave home with more than you need, using cash also helps you track your spending at once.
Critical For Emergencies
For natural disasters and other emergencies, using cash is often the only way to buy what you need to survive. Stores can’t check and validate debit and credit card transactions when they don’t have power. Keep cash on hand for buying gas to travel to a safer place, paying for temporary lodging and buying provisions like ice and water.
Carol Luther has published feature articles in print magazines, ghostwritten blogs, and produced digital content since 2007. She has published personal finance and small business articles for the Houston Chronicle, Mahalo, the Nest, USA Today, Wahm, and Zacks. Carol has designed, implemented and managed multi-year, multimillion-dollar domestic and international projects services for higher education, nonprofits, and small to medium businesses for more than 20 years.