Financial Literacy Month: Cards & Cash

Financial Literacy Month (1)


I personally love using cash and having it available! But I also know many people who are not about that cash life. There are benefits to both, but there some situations when using one can be more advantageous than the other. Let’s talk about it.

  1. Larger Sums of Money: When it comes to receiving a paycheck, it can be better to enroll with Direct Deposit from your employer. This process of receiving a paycheck is seamless, you don’t have to do anything after your timecard is submitted and your money will automatically arrive in your account, available for use with your debit card. If you choose to go the cash route (for the most extreme case) you’ll have to deal with going to pick up the check, be sure you don’t lose it, make time to go to bank, wait in line to cash it, then walk around with a potentially large amount of cash. If you lose that cash, it’s just gone forever. Neither is wrong, but one is definitely easier.
  2. Gas: Many gas stations offer a cheaper price if you pay with cash instead of using a card. For those of you who drive and don’t have the concern of leaving children in the car, I have saved up to 10 cents per gallon for paying in cash. (I have a HUGE gas tank, so I appreciate the savings!)
  3. Large purchases: Though you can often use cash for large purchases like a nice bicycle, vacation or even some places will allow you pay rent in cash, using an alternative method could be better for you. Let’s say you want to purchase a new road bike that costs $1,000. Though you have saved the cash, you could make a responsible credit card purchase for the amount of the bicycle. This would give you the protection of not walking around with a lump sum of cash that can be lost, perhaps gain some credit card rewards, some credit cards offer extended warranties beyond manufacturers, and you’ll be able to pay off that balance by the end of the billing cycle.
  4. Restaurants: When tipping at restaurants, your servers will be very appreciative if you leave a tip for them in cash. Of course, it’s not bad to tip on a card! It has to be processed and sometimes fees will cause their tip to be less than you intended. You can read more about that here in this article.
  5. Budgeting: For many people, they find that keeping certain budgeting item in cash helps them stick to their budget because they can SEE and FEEL the money disappearing. This kinesthetic experience resonates very well for some people and they are able to make choices about how they will continue. Some people prefer to disable overdraft protection on their debit card, or use a prepaid card instead to stick to their budget goals.

These are just a few scenarios to think about when deciding if using cash or card might be more beneficial for you. Are you a card or cash kind of person? Comment or Tweet me to let me know!

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