The recent data breach at Target should scare everybody. Said to affect potentially 110 million people, it is yet another reminder of how vulnerable data breaches economic system makes average Americans. Every time you swipe your debit or credit card at a store, you are essentially entrusting the store with your banking information and that they will protect it from being compromised. This isn’t intended to scare you, many of you have certainly swiped your cards countless times without any trouble, but to cause you to consider the best way of handling everyday transactions.
If you don’t want to swipe your card and potentially place your information at risk, the only real option is cash. While using cash may seem antiquated and not nearly as convenient as using a card, there are significant benefits to using cash besides protecting your banking information, and we will go over some of those here.
The first benefit is obvious: you don’t put your information at risk. Again, technology certainly can make our lives easier, and there are benefits to using a debit or credit card. But the risk and potential headache of having your information compromised looms large, particularly in 2014 as hackers are seemingly working overtime to obtain customers’ information in whatever way they can. Using cash for everyday purchases significantly reduces the potential that this could happen to you.
At a time when budgets are tight and families are pinching pennies wherever possible, there are financial benefits to using cash. If you use cash, you are much more likely to watch what you spend and keep yourself from going over budget unnecessarily. Many families use the envelope method, wherein they divide household expenses into categories and place the cash for each in an envelope. This is particularly helpful for trips to the grocery store, as you only spend the cash you have you are less likely to buy things you don’t need.
While some are guiltier of this than others, generally speaking when using debit or credit cards we are not as likely to consider every purchase as we would with cash. We don’t think about that fast food we bought last night or that movie we want to go see tonight because it is passive. We are not actively involved in ensuring that we have enough money to pay for the things we need. Neither movies nor fast food will in and of themselves bankrupt us, but a pattern of continued spending without thought of consequence could be disastrous for you in the long term. It still ultimately boils down to making wise decisions, but using cash will help curtail human nature and enable you to make wiser decisions with your money.