Latest News from The Musuneggi Financial Group

The Rewards of Paying Cash

MaryGraceWebBy: Mary Grace Musuneggi

Who of us uses cash today to pay for anything? We use credit, or debit, or Paypal, or maybe even checks. Some might think it is not safe to carry too much cash. and some that they can’t keep track of cash as well as credit card purchases.

 But recently, with the many security issues for credit card purchasers and identity theft for debit card users, carrying cash may be a safer way to go. Also, I have had debt counselors tell me that they highly recommend that their clients use cash, as that seems to make it harder for them to buy random, impulse purchases.

My friend, Tom, almost always uses cash. Never a debit card and rarely a credit card. Like many of us, he was raised by parents in the “good ole days” where credit cards were non-existent; purchasing things they could not afford to pay for in cash did not happen; and owing any one any amount of money, except a mortgage, was frowned upon. So he pays in cash.

The first reward for this is that he is never in debt. Secondly, he pays no interest to a lender. But the third reward is that he actually saves money. At the end of the day, after having paid cash, Tom deposits his change into a tin can. (Another habit he learned from his parents.) As the can gets filled it goes into a large can…and a larger can still. The most recent can was so heavy that it broke a closet shelf. So it was time to pour it all into two buckets and go off to the bank to deposit the coins.

In past years he would have had to roll all of the coins into wrappers, but his current bank has a machine that allows him to pour in the coins and then the total is added to his savings account. No fee to do this.

As he stood filling the machine over and over, a mother with her very young daughter came in behind him. The little girl had a one pound coffee can with coins. When Tom saw her, he apologized because she would probably have to wait a little while as he finished with his coins. Her mother used the moment as a learning tool, telling the little girl, “This is ok, we can wait, and someday, if you keep saving your coins, you will be able to come here with a big bucket of coins, too.”

So the morals of the story:

  • Pay cash….save your change.
  • Financial habits of our parents can have a great impact on our views of money.
  • Learning to save early is a great lesson for children.
  • Paying cash can bring many rewards

By the way, this small strategy netted Tom enough money to go on a great vacation….for which he will pay cash.