As I am sure you’ve read across the blogosphere, a lot of people who are working their way out of debt or have worked their way out of debt have chosen to not use credit cards at all. Some still use debit cards, others have gone to a cash-only plan (though I assume there are still checks written for bills – I can’t imagine mailing an envelope of cash to the cable company).
Is it possible, however, to do exactly the opposite and use a no-cash plan? A plastic only plan (meaning no checks)? I’m sure there are people out there doing it without realizing it. And it seems that every movie and book about the future seems to think that we will be a cashless society at some point.
When I first sat down to write this post, I thought that a no-cash, plastic only plan would be difficult, but the more I think about it, the more I think it’s doable.
Personally, I could do it, but it wouldn’t be worth it. First off, while I can pay my rent electronically, there’s an additional charge. I also believe there is a fee associated with doing bill pay direct from the bank to my particular apartment complex. Until that fee is waived, I will be writing a rent check.
I don’t use much cash, though I don’t like to be without it. I try to always have $20 in my wallet, just in case. In case of what, I’m not sure. What do I spend my cash on? I’ll use it if I’m making a very small purchase where it seems ridiculous to pull out the credit card, but mostly it goes to the Farmer’s Market or for splitting bills when I go out for drinks with coworkers.
Without cash, I could still go out for drinks and split the bill, it would just be more complicated. I would likely end up with the cash from everyone else and then have to deposit it. The Farmer’s Market is a different story. While a few of the vendors do take credit cards, that’s mostly those selling higher priced things. The vendors I buy from, the ones selling fresh fruits and vegetables, don’t take anything but cash. Do I need to shop at the Farmer’s Market? No. But it’s something I like.
Eventually, I think we will go to a cashless society. I have no idea when that will be, but it seems likely. Of course, that just adds to the risk of people being able to overspend and rack up extreme credit card debt.
Do you think you could go cashless? Would you want to?
For benefits of using credit cards check out these great articles.
Take Advantage of Credit Card Rewards
Cash, Credit, or Debit?
Credit Card Basics
Abundant Life Spending Spree – $400
I bet you thought I was going to go for a Kindle after yesterday’s post. Nope, today’s random purchase, if I had $400 to spend would be a new iPod and an Aerogarden. Yes, I realize the Aerogarden isn’t all it’s made out to be, but hey, this is $400 that I’m supposed to be throwing around!
Megan is a 40-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:
In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance. It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information. It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck. While that was working for me, clearly I needed a better plan.
While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.
Except that’s not what an emergency fund is for.
So I did a lot of research, read a lot of blogs, and decided that I needed a plan. I needed to budget. I needed to know what I was spending my money on. I needed to prepare for the future.
I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way. I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.
budgets are sexy says
Oh man, i could never go cashless! And that’s only because i feel it’s very safe to have at LEAST $5-$10 in your pockets at all times for emergencies (just like you in this sense).
c/c’s can’t do everything…yet 😉
I just don’t feel secure without some cash in my wallet or in the house. I’m not big into the Bible but did read the “Left Behind” series and the move to an all electronic, cashless society is a little scary in the sense that EVERY transaction you did would be there for someone to see. But I’m just a little paranoid like that. On the flip side, as a parent, I like being able to track my teen’s checking account online. So I guess, I’m a little hypocritical. 🙂
Right now I use my credit card for everything I possibly can. Even those $4 purchases at the drug store. For me, it’s an easier way to track my money, I’m racking up credit card points and I have a system of paying it off at the end of every week. I still use cash for things I obviously can’t. (And checks when there are no other choices or when fees are invloved.) But I rely pretty heavily on plastic.
I’m not totally cashless, but I’m really close! I pay all of my bills online. I use my debit card for pretty much all of my purchases.
I do have about $20 in my glove box in my car for times when I find myself in a cash-only place.
I like the convenience, and I like being able to easily track my purchases.
But, I sometimes wonder if it would be a good idea to give going all cash a try.
I don’t think I could ever go cashless. I’d always be worried about c/c systems failing and not being able to pay for needed stuff.
Plus I’m like you. I’m not paying a fee for conveience.
Suburban Survivalist says
I’m trying to go plastic-less, and I try to use cash whenever possible.
I could go cashless pretty easily. I almost never carry cash at all, and right now I write at MOST 1-2 checks per month. I’m sure it wouldn’t be that hard to find some other method of payment. In fact I’m running low on checks, after something like 7 years? and I’m wondering if I should bother reordering them. But I think this varies by area. People here don’t blink an eye if you use a debit card to buy a stamp. Where in other areas of the country, they’d probably charge you to do so. And in other countries, they might not even have the option.
No problem at all. Been going cashless for over a year or so. It couldnt be easier. There has only been one gas station where we have to have a minimum purchase so we just don’t go there.
If I lose my cash it’s gone. If i lose my card I cancel it and have a new one tommorow.
If you don’t have the disciple to stick to paying off the card but if you can pay it off i don’t see one positive to cash.
I use a debit card for everything I can. I use my credit union to send out checks for bills (free). I write a check for our rent (it goes in a drop box in the hall). If I really need cash for something I take it out just for that thing. If I get cash from somewhere I deposit it in the bank. Ideally, I’d use my card and bank for everything.
Ahh, but what would I stuff into a stripper’s panties?
Seriously, I’m like you–carry around $10 – $20 in case I need a bus or whatever, but basically only spend cash at the farmers’ market. Joining a CSA program (basically a farmers’ market but with just a few large payments instead of weekly small payments) is a way to avoid using cash but getting the same result.
When I lived in the US, I operated virtually cashless, keeping only $20 in my wallet should I need it and using plastic for as much as I could. I routed what bills I could to my credit card, if I could not; I set them up for ‘Auto Debit’ from my checking account. My credit card was (still is) paid in full automatically every month, carrying a zero balance. I am now living in Italy, is cash only here, or should I say cash is preferred here. I do not like carrying around hundreds of Dollars worth of EURO with me, if it is lost, or most likely stolen here, there is no hope of recovery. If one does not keep a receipt for a bill paid, the company will say, “The bill was not paid, you need to pay the bill.” More paper to keep track of, not what I like to do. One fellow I worked with that actually set up his ISP bill to be ‘paperless’ and is still having charges to his credit card, even though he canceled his service and left the country over a year ago.
Bad News Bear says
I’m 99.9% cashless – the only time I use cash is when I take cab rides, which is at least two times a week. I could hang around for a cabbie that takes credit cards, but it’s generally inefficient.
Oh, I suppose I use quarters for parking meters. Fine… 99.8% cashless.
Cash? What is that? LOL
Our bank doesn’t charge for sending checks online, so we haven’t had a checkbook in five years.
Between the bank account and the debit card, we are hardly ever seen without cash.
When we go out to eat, sometimes there are four of us with debit cards. I keep post-it notes in my purse for these emergencies…what you do is put a post it on EVERY card with the amount that is to be charged to the card. You can split payments everywhere I’ve ever been, and it’s way easier than trying to get separate checks.
I don’t do things that require cash. Putting it on the debit card makes it easier to track purchases and know what you’re spending. But we’re hyper-vigilant about the whole money thing, so it’s not like debit purchases “don’t count” and I think we feel the same pain when we use the debit card that others feel using cash.
Bankruptcy Ben says
I operate pretty much cashless. I have direct debits (automatic payments comming out) set up for all my bills.
We use eftpos mainly, which I think is like debit cards for you (american) guys.
If i have cash in my wallet it seems to get spent, no cashy, no spendy!