Cash basis

I have a friend who always gives me a little grief because I never carry cash around with me. We’ll go out to grab coffee somewhere and he’ll slap down a couple dollars to pay for his drink, while I’ll slide through the plastic.

“You know that costs these small businesses money? They have to pay fees every time someone uses a debit card,” he’d say.

The manager of this locally owned coffee shop entered the conversation at my friend’s prodding. He said the store generally pays between $800 and $900 per month in processing fees for credit and debit cards – considerably more during busier months.

So I’ve spent the past week carrying cash around in my wallet, instead of using my debit card for every purchase I make.

Now, of course I knew about these fees; I just don’t think about it. The money the stores must pay for each individual swipe of the card isn’t much, but in aggregate, it’s a considerable sum. And it’s an effective reduction from the purchase price of the product, which likely affects the store’s bottom line.


For me, using a debit card for most things is pretty convenient. It’s always there, waiting to be pulled out and used – and it doesn’t matter if it’s a large purchase or something as small as a shot of espresso at the local coffee shop. It works all the time, every time, so long as I have some money in the associated bank account.

My friend who pointed out the issue with the fees also pointed out that his carrying cash helps him limit spending. Instead of, like me, whipping out his debit card for every impulsive purchase he has to check his wallet to see how much cash he has on hand. One day, when we grabbed some breakfast, before ordering, he looked in his wallet to see how much cash he had. I think it was something like $7. So instead of ordering the full breakfast – eggs, hashbrowns and bacon that I got, he went for the much lighter, and much cheaper, French Toast.

So I decided this week – with a little help from a checking account that this week that had an appetite bigger than its ability to feed it – to give this cash carrying thing a try.

Here are some of my observations:

  • I spend more money when I rely on a debit card. When I don’t have to see the money physically leave my wallet, it’s easy to pretend I have more money than I really do.
  • I thought about my purchases more. Since I took my debit card out of my wallet this week and decided to spend cash instead, I had to look and see how much money was available, and consider how long I wanted it to last me.
  • It’s harder than I thought to get through the day without spending any money at all. Using a debit card sometimes doesn’t feel like spending money. So that drink at the Kwik Shop, that extra cup of coffee (or more likely, a latte) comes pretty easy. But with cash, I could see how much money was traveling from me to other people, and it sort of made me a little embarrassed at how easily I decide to spent money on small, relatively meaningless things.
  • Related to above, but there are a lot of things I do everyday that are either habit, or just part of a routine. I probably ought to evaluate that.
  • Sometimes, with cash, I would still spend money, but I would chose to spend less, like my friend did at breakfast. Such was the case with the aforementioned coffee – there were times when I’d likely have gotten a latte, but chose the regular coffee instead, because it was cheaper.
  • Unlike a debit card, there’s a very physical reaction to spending cash. I was letting go of something. Taking something out of my possession and giving it to someone else. I could feel my wallet getting thinner, and I could see my funds depleting – leading to an increased resistance to letting go of my dwindling cash reserves.
  • I was far less impulsive on any buying decision.

So, after years of relying on a debit card for the bulk of my purchases, I’m resolved to make the move to cash. The inconvenience of not having enough cash on hand to is a change, but it’s one worth dealing with because I think it will make me less of a consumer – and I’ve never really considered myself to be a consumer. So this was a good realization, and one that is a little embarrasing. I tend to not spend large amounts of money on very many things – even large by my somewhat meager standards – but I caught myself spending money carelessly. I think going back to cash will help with this.

It’s funny, too, because I used to be a cash person, years ago.

I kept a certain amount of money in my pocket, and would spend it down between paydays. If I ever had extra leftover, I tucked it into a hidden pocket in my wallet – sort of an onboard savings account. If I ran out of cash before payday, I just didn’t buy anything, because it meant there was no money with which I could buy anything. I don’t know exactly when I moved away from this. I guess when I got to a point where I actually had enough money to pay my bills each month without much strain or worry.

There’s a certain way you live when you’re pretty poor, and trying to claw your way out, that forces you to consider where you’re spending every cent you have. Also, you don’t want to use a debit card because you never know when it might be embarrassingly declined with a line full of people behind you, casting their eyes downward on you with all the shame they can focus. Apparently, I’ve fallen victim to having enough money most of the time. The comfort of knowing I’d most likely have money in the bank has allowed me to become a little careless, or at least thoughtless, in my spending. And while that’s a nice feeling – and one for which I’m thankful – it’s also a little upsetting because it means that I’ve sort of forgotten what it was like to know that I had $10 to my name and I had best make it last.

It seems those two versions of me ought to get to know each other again.

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