Cash is King

By Ken Matesz

Had a big mix-up at the store today.  Apparently when the cashier said, “Strip down, facing me,” she was referring to my credit card.

People hate cash.

Isn’t cash just a pain? Takes up lots of space in your wallet, blows away in the wind. It’s just so cumbersome and inconvenient, isn’t it?

Why use and carry cash when you can carry plastic, right?

In fact, that was the general idea behind a blog post by a broke, in debt, grad student.

Like most people anymore, he has no understanding of money or debt and finds cash to be just a hindrance to life. I was shocked when I noticed that he later made a post about why he “loves” cash.

After reading why he “loves” cash, I could see that he still, like most people, has no idea why cash is king.

I, personally, don’t have a credit card.  Not one.

Top Ten Reasons Cash is King

1. It’s Anonymous: When you pay cash for something, your purchase can never be tracked by another person, a company, or an institution like the IRS. No one but you knows what you bought and how much you spent (except, of course, the cashier who received your money). As soon as you walk out the door with your item, your purchase is shrouded in mystery. It is principal step toward having real privacy.

2. No Fees – Ever: Many people argue, as does the broke grad student, that if you pay off the credit card every month, it’s actually better than cash.  Yet, you can and will incur fees by missing a due date when you’re really busy. And, often, businesses charge more for items knowing they have to pay charge card vendor fees. Those fees never happen with cash.

3. It cannot be refused: Some businesses limit the type of credit or debit cards they will accept. But all businesses, by law, must accept cash if it is tendered.

4. It’s Sexy; Any hair-brained idiot can go out on an expensive date at a fancy restaurant or rent a high-end hotel room with a credit card. But your date will be truly impressed when you pull out cash and pay, in full, with a generous, cash tip. He or she knows right away that you really do have money, not just the appearance of having money.

5. Cash Teaches Budgeting: Using cash requires discipline and forethought. You must be able to accurately budget to use cash. Anyone can rack up a credit card balance, then scramble to come up with enough money to pay off the balance at the end of the month. But there is care, patience, understanding, and discipline in knowing how much cash you can spend right now and still get through the week, month, and year.

6. Cash Teaches Saving: When you live off of cash instead of credit, you cannot buy big-ticket items on a whim. With credit, it is much easier to conceive of having something “right now” even if you may not be able to pay for it for a long time. Cash saved, over time, is one of the biggest exercises in restraint and discipline I can think of!

7. Cash is Fast: Try it yourself! Compare paying for a simple item with a card or with cash. Often, the cash transaction is much faster. Many forget that once you checked out at the store, your transaction is NOT finished. Awhile later, you will get a bill online or in the mail and will have to actually pay for the items you bought; so you have two “checkouts” instead of one!

8. Cash Discounts: Locally, many gas stations charge considerably less for cash instead of credit. But smart businessmen everywhere will often give a significant cash discount. Why? Because of reason #1, above.  You can even get a cash discount from a doctor.

9. Self-limitation: Let’s face it. If you have only $200 in your wallet, you cannot spend more than $200. This is how cash teaches the discipline needed for #6 above. Even if your heart is burning to make that large purchase and you would if you could, you just can’t if you don’t have the cash in your wallet. It’s a built in check-valve to your “wants vs. needs” dilemmas.

10. It’s real: Cash in your pocket is your money, available to be used in whatever way you choose right now. Credit in your pocket is fictitious money. The whole credit industry is based on the illusion that you really will have enough cash someday to pay off your credit balances in the future. If you spend all the cash in your wallet today, you may be broke if you lose your job tomorrow; if you lose your job when you have a large credit balance, you’re not just broke, you’re in debt with accruing interest.

If you want to live like a king, start using the king of all payments.

Pay with cash and get on with your life.