The Downsides of Cash + Reasons to Avoid Using It

I hate using cash.

I know cash is often idolized, it helps you control your spending. And you shouldn’t rely on your cards too much.

I don’t care using cash sucks. There are too many cons and not enough pros. Here are 5 reasons I dislike using cash.

I don’t like carrying cash

To be honest with you I don’t live in the best of areas. There are lots drug issues and people living on the streets. 

I don’t think I’m going to get mugged or anything. But I don’t want everyone knowing how much money I have.

When you pay with a card no one knows if you have lots of money on that card or if you’re using your last $20. They learn nothing about your finances when you pay.

Another reason I dislike carrying cash is having to physically carry it.

Cash is annoying to pay in. It takes up more space. And if you ever walk around with change you know that coins get heavy fast. I don’t want to deal with those things.

Cash harder to recover

If you lose cash, it is gone forever.

If you lose a card there are ways to shut the card down before money gets spent. And someone else uses your card most of them have insurance and so your cover. 

So if my debit card was stolen and someone else used it. Even though the money came out of my account I know that I’m covered by my bank.

Cards are also easy to watch for signs of fraud or theft.  You get a record with cards about what you spent and where. So as long as everything on there is from something you did. Then you know nobody stealing from you.

With cash, there are no records. And if you carry lots of cash it all too easy for someone to take some from you without you noticing.

You earn nothing – no interest or points

To be completely honest I haven’t done much in looking for good interest rates. And credit cards with good rewards.

Still even without optimizing anything I’m making something by using my cards.

Right now I think the interest rate on my chequing account is .5% so it decent. And every month I earn a few dollars of interest.

Even my credit cards the rewards are about 1 point for every $1 spent with double that on cash. Once again it not the best but I’m still earning points with my daily purchases.

Now compare this to cash. It earns me 0%. It has no points. Tell me again why cash is better.

Harder to move into my different accounts 

In this day an age it important to easily move your money around.

Most people probably have a few accounts at a couple different places.

Once you have multiple accounts you’ll need to be able to move money between them. Cash moves easily in real life but when you start transferring between banks it doesn’t.

It unrealistic to think that I would actually drive around delivering cash from one place to another. Online banking is much faster and easier.

Another downside of cash is you can’t automate it. Recently I set up a few automatic contributions to my savings account and my retirement account. You can’t do that with cash. It simply doesn’t work.

Cash is harder to track

Did you ever had a time where you look at your account balance and though what happened to my money?

Well, when I have that look back at the transactions that happen. It will show me exactly where my money went. That something you can’t do with cash.

I also enjoy balancing my budget. Since I enter everything manually it a good way to double check and catch any mistakes I may have made. So I look at my bank account balance make sure it matches the balance I have in my budget.

There are times I had made mistakes. And this the easiest way to check it. Even if the balances don’t match I go back through the transactions and see if there anything I may have forgotten to put in my budget.

Wondering what budgets are? Check out my budget post which covers everything about budgets.

I can’t do that with cash. I track my spending even when I use cash but I have no way to double check it. There is telling if I’m making mistakes or not.

You can’t stop using cash now because its the responsible things to do. As you just read it not always the best choice.

The only reason that is worth using cash is it makes spending hurt more. You can replicate this feeling by manually tracking your spending.

Not everyone needs to feel every time they spend. If you manage your money well it might not affect things that much. It would be worth considering only if you have spending problems.

In general, cash is not worth the hassle. Keeps things simple and stop using cash.

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downsides of cash