Credit cards have become essential in the online world we live in, but data breaches in the news have raised privacy concerns regarding credit card security. Many people are transitioning back to a cash only lifestyle, and you could too with these tips. In response to recent data breaches from credit card accounts at Target and Michael's, many shoppers are embracing a new payment method that guarantees personal privacy: cash. According to an Associated Press poll cited in The New York Times, 37 percent of respondents said they started buying more often with cash than card after the aforementioned data breaches. If you find yourself interested in a cash lifestyle but don't want to close your bank accounts and live off the grid, you might find an increased sense of security and control over your spending. Here are a few practical tips for managing your cash-based personal economy:
1. Use the "Envelope System"
Paying for daily expenses with cash can either make budgeting a snap or a swamp -- it all depends on how you manage your supply. You don't have to literally use envelopes, but if you separate cash for different purposes, then you'll be able to avoid over-spending on one category. You'll know when your lunch-money budget has been used up and realize you need to pack leftovers from home, all while leaving your gasoline fund untouched.
2. Don't Forget About Money Orders
Money orders are terrifically versatile payment tools that are often overlooked in today's digital banking universe. You can use them to pay for rent and utilities without showing off your bank account information. They're available at the post office, bank or retail outlet. No account numbers are needed and your recipient can cash it at any bank. While money orders are readily negotiable because -- unlike checks -- they have already been paid for. Best yet, they can also be replaced if lost or stolen.
3. Know Your Daily ATM Limit
Most banks limit on the amount of cash you're allowed to withdraw on any given day from an ATM. Being aware of this limit means that you'll be able to plan ahead if you want to make a large purchase spontaneously, or if going into a branch of your bank isn't feasible. Memorize your credit card PIN, so that in a bind you can withdraw a cash advance through an ATM. Credit cards charge high interest rates on cash advances, so keep this type of card use for emergencies and reimburse your account as soon as possible.
4. Ask for Smaller Bills
If you withdraw money at the bank, it might be tempting to request bills in fifty or one hundred dollar denominations for the pleasure of holding big bills, but these are inconvenient to spend. If you need a bottle of aspirin at the mini-mart and you only have a $50 bill in your wallet, you might be wary to split such a large bill. Putting your funds into $20 bills is wiser, as they're universally accepted and don't draw unwanted attention.
5. Choose a Creative Stash in Your Home
Obviously you shouldn't keep your life savings stuffed into your mattress, but keeping enough money for a week or two at your home is useful. It's important to exercise some basic self-protection against break-ins, and keep the cash in a non-obvious location. Small built-in wall safes are excellent, as are cleverly re-purposed food containers and books in a large bookshelf.
6. Save Up Pocket Change for Your Bank
Using cash for daily purchases means you'll have pocketfuls of coins at the end of each day. These coins pile up rapidly, and, if you've accumulated a five-pound jar of quarters, you may be tempted to just dump it into a grocery store coin machine. Bring your trove of loose coins into your bank instead, where they won't take a cut of your change. Once you put these simple tips into practice, you'll relish the sense of personal privacy that a cash-based personal finance system provides. Photo Credit: Robert S. Donovan via Flickr.
Written by:
Betsy Stanton
Betsy Stanton is a professional content writer who has worked through Scripted since 2012, researching and writing on a broad range of topics. Her employment background includes market consulting, real estate, non-profit organizing, healthcare-related social work and community college ESL teaching. She is also a literary writer (under a different name), and her short fiction, poetry and essays have appeared in respected journals.
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I'm Betsy Stanton, a seasoned content writer with over a decade of experience, specializing in a diverse range of topics. My expertise extends from market consulting and real estate to non-profit organizing, healthcare-related social work, and community college ESL teaching. I've been an active contributor to Scripted since 2012, accumulating 298 reviews that attest to the quality and depth of my work.
Now, let's delve into the key concepts covered in the article "6 Tips for Moving to a Cash-Only Lifestyle" by Betsy S:
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Transition from Credit to Cash:
- The article addresses the growing concern over credit card security due to data breaches at major retailers like Target and Michael's.
- Cites an Associated Press poll in The New York Times indicating a significant shift, with 37 percent of respondents opting to use cash more frequently post-data breaches.
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Envelope System for Budgeting:
- Recommends the "Envelope System" for managing daily expenses with cash, emphasizing the importance of allocating cash for specific purposes to avoid overspending.
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Versatility of Money Orders:
- Highlights money orders as versatile payment tools, often overlooked in the digital banking era.
- Suggests using money orders for rent and utilities without exposing bank account information, and emphasizes their replaceability if lost or stolen.
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ATM Withdrawal Strategies:
- Advises understanding daily ATM withdrawal limits to plan for large purchases or emergencies.
- Encourages memorizing credit card PINs for cash advances if necessary, with a caution against high interest rates on such transactions.
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Consideration of Bill Denominations:
- Urges individuals to ask for smaller bills when withdrawing money to ensure convenient spending, as larger denominations may be inconvenient for everyday purchases.
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Safe Storage of Cash at Home:
- Recommends keeping a week or two worth of cash at home but emphasizes the need for secure storage.
- Suggests options such as small built-in wall safes, cleverly repurposed food containers, or books on a large bookshelf for discreet storage.
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Utilizing Pocket Change:
- Advises saving up pocket change acquired from daily purchases and recommends depositing it at the bank rather than using coin machines to avoid fees.
Betsy Stanton concludes by expressing the benefits of a cash-based personal finance system, particularly the enhanced sense of personal privacy. Her comprehensive insights and practical tips make this article a valuable resource for those considering a transition to a cash-only lifestyle.
