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"I don’t use cash. I do everything on my phone.” If you are older, you have heard this from younger people. If you are younger, you might say this all the time. Perhaps two other favorite expressions are “I cannot remember the last time I was in a bank branch” and “What is a paper check?” We are heading towards the day when we will be a cashless society, but today there still are compelling reasons to walk around with some cash in your wallet.
Let us focus on your domestic lifestyle near to home. There are other good reasons for carrying cash on vacation, but that’s different story for another time.
1. Going out for drinks. You get together with friends on Friday nights. This sometimes lasts into the early hours. At the end of the month you are often surprised with how much you spend partying. When you pay in cash you are more aware of what you are spending. You know when your money runs out, it is time to go home.
2. Business passing along credit card surcharges. I have seen liquor stores, restaurants and other businesses posting a sign indicating there is a 3% (or other amount) charge for customers who choose to use a credit card for payment. They want to pass the cost along to you. Give yourself an option.
3. Splitting the bill with friends. You dine out regularly with friends. When two couples go out, requesting separate checks or splitting the bill evenly makes sense. When there are eight of you and people order wildly varying amounts, it is good to have the option to pass some cash to the center of the table instead of holding one of several credit cards each paying an equal (but uneven share.) You have options.
4. Tipping directly. Some restaurants automatically add a gratuity. Others have a separate tip line. How much goes to your server, who might have done a great job? You don’t know. Carrying cash allows you to tip your server directly.
5. The informal economy. If you are a collector and frequent outdoor flea markets, you often find yourself in situations where “cash is king.” Put another way, many vendors are not setup to accept credit cards or other forms of payment besides cash or personal checks. I had this situation recently when my wife found a great deal and I had to find the nearest ATM.
6. Let me leave the tip. You dine out with friends. They insist on picking up the check. You might not want to be the recipient of their generosity because it might imply a future obligation. Leaving the tip in cash allows you to still contribute at that moment.
7. Gas stations with cash and credit pricing. You see this all the time on the way to and from work. The lowest posted price is not available to credit card users. Carrying cash makes sense, but buying gas at Costco (if you are a member) is even better. Their prices are low and they only take credit cards.
8. Tipping on wine at dinner. Here is a challenge for wine fans. You can make the case why the filet mignon costs more than the chicken. When you order a bottle of wine, the $50 bottle involves the same presentation skills as the $500 bottle. Should you by tipping the wine steward 10x more for the same amount of effort? Requesting a separate check for the wines ordered allows you to isolate the tipping on this portion of the meal. Tipping in cash means it goes directly to the server.
9. Power outages. If you live in a big city, these are very rare. If you live in an area with extreme weather, that’s a different story. If you live in the suburbs or a rural area, power outages happen. This means you cannot make purchases with plastic. Cash might give you another option.
10. Feeling secure. Simply having money in your wallet gives you a feeling of security. In the worst case situation, if someone robbed you, you have something to hand over. If you are out with friends and the conversation turns heated (or your phone dies) you have options for getting home. Carrying cash means you have options.
We might be heading towards a cashless society, but we are not there yet.
Related: How Many Parts of Life Rely on Trusted Relationships?