Thursday, July 26, 2012

Where your blogger grumbles about cashless societies and new needs

I was going to snark about how I'm becoming a Luddite.  Well, not really.  I mean, I am blogging, after all.

Fortune magazine had an article about the death of cash.  There are now ways to pay for things with your smartphone, instead of using cash, debit cards, or credit cards.  My initial reaction? I winced.  Then I thought, Why are you being so reactionary?  Maybe it's a good thing.  I'm not sure how I feel about this.

On one hand, yes, GEE WHIZ TECHNOLOGY. It's amazing.  Indeed.

On the other hand, I remember those studies that show how easily we spend more when we don't actually handle the money ourselves.  Using a credit (or even a debit card) instead of cash often results in people  spending more than usual--in fact, the amount more people are willing to spend with plastic is jaw-dropping. Somehow, the act of touching your money and handing it over makes it a bit more difficult to part with it.  If you don't see it or touch it?  Well, it's not like it feels real, then. It's like play money.  I'm way more daring in a Monopoly game than in real life, and for good reason.

Also, I'm not all that chuffed about yet another gadget becoming a necessity.  I have a lower tech, pay as you go dealie mobile phone.  It's already becoming "necessary" to use a smartphone to get more information on certain products--you scan the symbol on them--and if this becomes the main way to pay for things, we'll all need these stupid things.  Or our lives will be much more difficult.  Back in 1995, it was quite possible--and common--to not have an internet connection.  Now you really do need one if you want to get a job, stay in touch, get information, etc.  Things that used to be luxuries become needs, and it's not always because we got used to having them and refuse to let them go.  It's because people who either have the money to spend, or who are willing to go into hock, use these things and suddenly it's assumed that everyone does, so the way we used to do things is almost forced by the wayside.  Prospective employers get job applications via email and job sites.  Working payphones are becoming a rarity.  And so it  goes.

If plastic and smartphone modes of paying were so ubiquitous when I was a kid or a teenager, I would have been lost.  It really helped me to actually count the money, see it, have to hand it over.  It made it real and concrete to me.  I didn't have to try and remember how much was in my account (I only went by how much was in my wallet) and I didn't have to try and remember that this was real money with real consequences for me if I blew it all.  A lighter wallet is all it took to remind me of that.

So, yes, gee whiz! Technology is cool.  But I wonder how much deeper in the financial hole people will go when it becomes even easier to spend money.  You don't even have to pull out a card anymore, you just use your smartphone.

I don't charge very many things anymore (and I don't have a smart phone so this whole new way to pay is moot for me).  Right now, I pay for gas with a credit card (I have to buy gas to get to work, so it's not like this is a frippery that I'm spending more money than necessary on.)  I pay the thing in full every month.

I used my debit card for other purchases but now I'm wondering--maybe I should go for a month by using cash only.  Even for gas.  I'm wondering if by using my debit card it's easier for me to spend more than I intend to.

What do you all think?


  1. Food for thought! For us, we use cash for the things that it benefits us to use cash -- small purchases sometimes incur a service fee if using credit, we get a cheaper price per gallon on gas with cash. But for the rest we do use credit, for the rewards/cash back. But, we pay it all off at the end of the month. And I'm fairly responsible with the bookkeeping, recording all expenses.

    I do wonder, though, if I'd be even more careful, if I only had cash for purchases. Would I tally up what a dinner out would cost and think about the cost for a few minutes, before ordering? Would I put more things back on the shelf when out shopping, even at the Goodwill? Would it teach my kids even greater responsibility if they saw me only using cash?

  2. I have this issue already! We are reeeeally out in the sticks and still have 0.5mb broadband (and most of the time it's slower than the old dial-up internet.. sniff sniff sad face!), but website designers don't think about people in rural areas and cram their websites full of huge images that take aaaaages to load. :(

    Someone asked me how to apply for a job at my work the other day, and I told them they had to go online, and they looked sad and said they didn't have a computer. Well, if people don't have a job it's pretty likely that they can't afford a computer/internet if you think about it! The nearest library is a good seven miles away too, and bus fares are expensive.

    I try and have my spending money in cash form, because I write down all my purchases anyway so I know where it goes. It's easy to spend less because if you don't have cash on you then sorry, no stuff for you! :)

    I don't really think I would spend that much more on a card, but it's hard to say. I mainly think about how long I had to work to earn that price. (Usually A LONG TIME!)

  3. Everybody makes great points. I do not use a credit card; I have a debit card which I use exclusively for a standing online order which automatically comes out of my account each month. If we do not have the cash on our person to buy something, we go without. It keeps our lives simple. I GET why folks want to have apps for this, that and the other but it's not for this household. We all do what works best for us and we can really learn a lot from one another.

    Call me a Pollyanna but I believe we will live to see the day when everyone has all they need and no one will worry about every dime the way we do now.

    I'm enjoying your blog a bunch!

    Mother Connie

  4. This is defintiely something to think about!

    I don't know. On one hand, I find that spending cash is a hassle for me. It's just too easy to put it all on my credit card. However, I pay it off several times a month so that I avoid interest and this makes it easy to track my spending.

    On the other hand, people who have less impulse control may have a problem. If all one must do to purchase something is wave their smartphone, I could see the financially disabled of our society getting into trouble.

    One thing that I have found is that using credit cards only makes it almost impossible to teach my daughters about money. My 3 year old has a fake cash register and we often play "store" with her play food. She give me food, I give her play money. So it's hard for her to understand the real world where mommy never actually has any money.

  5. This is a long-ago story. My son was 7, so this had to be in 1975. We were going to get a Coke outside at a sidewalk Coke machine and share it between my son (7), daughter (5) and me. I kept little cups in the car for dividing a Coke, drinking as we drove. They knew it was to save money and not drink so much Coke. Oh, yes, the "I have to pee" problem was partially solved. Plus, they rarely spilled the bit they had because they drank it up. I searched my purse, looking for the 45 cents, muttering all the time about the not finding change. My son very innocently said, "Why don't you just write a check?" He was serious, not trying to be funny.

    The point? Children watch even when we don't think they are and soak up money lessons. I wrote a check for groceries, doctor office visits,meds at pharmacy, swim team fees, baseball fees, dance lessons, oil change, sports equipment, birthday presents for other children, restaurant visits. I wrote checks for everything in a very controlled manner. It would have been all the same if he had seen me handing over a credit card. He never saw me use cash! I had a major cc for travel emergencies.

    The only cc I own is a store card that I rarely use. Often, I get $200 from the bank just so I will have the cash to use instead of writing checks. One bill I pay by check is never posted until 3 weeks pass, so I pay that $60 in cash. Gas for the month used most of the rest. However, with the cash I know I have on me, I am more apt to stop for fast food since most don't take checks. That is the only downside of using cash for me.

  6. Interesting and thought provoking post.
    I only use cash or cheques if I need to send a payment through the post. I refuse to have a credit card because for me, it's likes spending money that's not mine and then having to pay it back. I don't really like having a bank loan because you have to pay back more than you borrow so, I try to save for the item I need (not want) or save for a larger deposit. I am not so sure I like the idea of payments by smart phones because its similar to using a credit card and too easy to loose control.