No matter what the haters say, cash will forever be king. Although there’s a bull market somewhere, it might feel impossible to spot so buckle up and stash that cash before it’s too late. Luckily with July’s CPI reading lower than expected at 8.5% due to lower gas and food prices, there are hopeful signs inflation may have peaked! It might take a while but it’s easing.
Becoming more comfortable using, holding onto, and of course, paying with cash will keep you more financially sound, mature, and responsible for the rest of your life. In this digitally autonomous touchless world, it can be difficult to convince yourself to keep cash on hand, besides the type for emergency savings.
My generation, in particular, can come up with all the reasons why cash is a no-go payment option. From being too bulky to not classy or worst of all, dirty and green, we can blame cash all we want but at the end of the day, the more you develop a better relationship with cash, the greater chances of financial success. Plus to any seller, a 100% cash offer makes you the most attractive buyer!
What strikes me about personal development and personal finance is that it is extremely personalized to the point where people naively believe they know more than the average person. However, when it comes to these two topics in particular, arguably the most vital skills in life, the majority of Americans are clueless. They don’t plan for the worst, sign up for all the credit cards they want in hopes of getting a few dollars back in rewards in exchange for overlay fees and debt, and don’t save and invest nearly as much of their earnings as they should.
Inflation and this digital world are no excuses for empty wallets and only Apple Pay. Cash will always be king and although it may be deflating, it’s always necessary to keep on hand, no matter if you’re living solo or have 3 chickens relying on you until they leave the nest at 18. Instead of having to sell your investments at the bottom of the market, pay your marginal income tax rate on top, and lose out on a passive income source on the spot, keeping your emergency savings locked up is a no-brainer, not to mention always keeping cash on hand, even if you believe it is a ‘not so green’ option in this day in age.
Why Carrying Cash Is A Must
Beyond your emergency savings account that is stored and not touched until you need to tap into it which cannot be predicted only planned for, paying with cash on hand is even more crucial, especially when you are in certain situations where you know your emotions and quick decision making will get the best of you and cause regret the next morning.
I can’t count how many times I’ve gone out to lunch with colleagues or needed to quickly grab something from the drug store and pay with my card. There are pros and cons to using both payment methods however for the majority of Americans who are living paycheck to paycheck and their take-home-pay is being swallowed by inflation and have poor money-making habits relying on the lottery system instead of on determination, and consistency through a long-term outlook, many cannot afford to swipe that card every time they head to the store.
Sure, credit cards build up your credit score, help you earn cash back, redeem various rewards, and are there for convenience yet sometimes the more inconvenient options presented in life to the cashier will not only teach you more lessons but are not meant to be improved or made easier. In this case, cold hard cash should always be kept.
Not only does paying with cash make you more aware of what you are giving, but it also allows you to not overspend in the first place!
This is not rocket science or any novel news yet is something people frequently overlook, particularly my tech-savvy screen-addicted generation who prefer empty pockets and slick thin wallets. When paying by cash, you are slowing down by taking the time to assess and compare if you really need to make the purchase in the first place.
Given that we cannot do this comparative analysis with every purchase in our lives, it makes sense to perhaps only purchase necessities with the card and for luxuries or discretionary items when out on a lunch date or going window shopping stick to cash. Knowing how much you have to spend and not being able to borrow or go over the limit is your best friend. The bank isn’t watching out for you. You need to be responsible for yourself.
Although many small businesses and companies nowadays are moving to a cashless system, it isn’t all gone. These past 2 weeks I tried using only cash on my outings and grocery shop runs and let me tell you, in the Big Apple if there’s no problem using cash, you won’t have any trouble elsewhere! Urban areas tend to set the trend so there seems to be no going away with cash especially when sales tax and payment processor fees are charged to the merchant when using a cashless method of payment.
Since I don’t buy $12 matcha and avocado toast at a digital-only corner store, cash was no problem to use and in fact, encouraged since who doesn’t want to receive their earnings immediately? It’s not only an incentive for yourself to slow down and be mindful but for the merchant as well! Have you ever wondered why contractors and farmers’ markets prefer cash? It doesn’t need to be recorded as income and as a result, income taxes are saved.
Although the number one stressor in life for Americans is their finances, spending money doesn’t have to be painful if you take it the classic way of using physical cash and supporting your local small businesses instead of billion-dollar behemoths that surcharge! Take the pedal off the brake for a bit by cruising into your next purchase using cash. It will set you up for success and before you know it, you’ll feel more appreciative of what you purchased, not over clutter your life, and have real change left over!
Don’t fool yourself with the trusted dollar! It may very well be the reason you finally become financially free later on.