“There is no soap or Brillo,” said Violet. “We have to buy some.”
Arthur put his money in a bag and they went to the store.
from Arthur’s Funny Money
written and illustrated by Lillian Hoban
Harper & Row, 1981
My grandpa (Mom’s dad) had a banker’s set that my brother and sister and I played with when we visited. It was hinged metal and folded out to a three-sided “banker’s window.” A drawer was full of play money, and we’d take turns counting and sorting the coins and bills. Sometimes we’d pretend to buy stuff from each other.
Grandpa taught us how to save money. He taught me about interest, too, the money the bank paid me for letting them use the birthday and Chanukah gifts I added to my account. I was little, and I didn’t get how they used it. Giving my money to the bank so someone else could buy a house or a car didn’t make sense to my six-year-old brain. Grandpa never got into the part of the interest equation where the house-buyer or car-buyer had to pay the bank for using its money, which when you think about it could have been mine.
And when he convinced me to put my collection of silver dollars into my bank account, I did it. I gave my ten silver dollars to the bank teller. He stamped my book with the amount of the deposit. I’m still sad that when I wanted them back, well, let’s just say I learned a little about how you don’t get back the exact same money you put in. I still had ten dollars, but I never saw those beautiful, silver women in their flowy dresses again.
I like the feel of cash in my wallet and the heft of a pocket full of coins. It is real, solid, tangible. My husband likes to buy everything with his credit card. When he gets his statement, he pays in one fell swoop. Everything’s in one place. One payment and he’s done.
When I buy new shoes or have lunch with a friend or a get my car washed, I like to pay with cash. I feel in control.
An amusement part a couple of hours drive from my house announced that beginning this season it will no longer take cash. All purchases: parking; rides; food; are paid by credit card or debit card. When your credit card bill comes, you’ll be days or weeks away from the amusement park experience. All you’ll have left are your memories. So, maybe it’s the memories that we are really buying when we spend money to go to a baseball game or a concert or an amusement park. That’s pretty nice, actually.
Cashless venues are becoming more common.
It’s more convenient, I agree. But most people who rely solely on their credit or debit card spend more than they would if they spent cash. Turns out, a lot more. According to shiftprocessing.com consumers spend 83% more on credit cards than they do with cash. The average credit or debit card purchase is at $112, while the average cash purchase is just $22. Factor in, though, that most people spend cash on small purchases while most large-ticket items go straight to a credit card.
Spending cash is final. No debt, no interest accumulation, no paybacks. Spending cash might be safer than using credit, too. In 2018, the identity of 14.4 million Americans was stolen. Stealing credit card information is the way most of this happens.
And what about all the people who don’t have access to a bank?
The latest FDIC (Federal Deposit Insurance Corporation) statistics (2019) show 6.5 percent of U.S. households did not have a checking or savings account. In order to access credit, they need to use an alternate source like payday loans, check cashing services, money orders, pawn shop loans, or borrowing from friends or family. Most of these options come with a heavy interest cost. So while using cash instead of using credit usually means spending less overall, some people just don’t have enough cash. That’s a subject I’ll have to save for another time.
Now there’s a new way to pay. Actually, it’s not so new. people started talking about cryptocurrency on the internet in 2008. In August, the name bitcoin.com was registered online. Bitcoin’s mission is to create more economic freedom in the world by providing choices regarding a one’s own personal resources. Bitcoin’s complete Mission Statement is here.
Enter Satoshi Nakamoto. Maybe a single person or maybe a small group of people, no one knows for sure, Satoshi Nakamoto circulated a white paper (an in-depth report that explains a complicated topic and provides a solution) in 2008, to describe the powerful banks and banking institutions and the public’s distrust of them during the financial crisis.
Instead of depending on a bank or lending institution, transactions can use cryptographic proof to verify the movement of money from one person to a corporation like Amazon or a seller on Ebay or Etsy without using a bank or third party as an intermediary. So no check to write. No debit card amount to keep track of. No need to pay off credit card debt.
“Bitcoin was created so people don't have to rely on government or financial institutions to make financial transactions.” (usnews.com Feb. 4, 2022)
But cryptocurrency itself is complicated. And extremely volatile, worth thousands of dollars one week, and crashes to almost nothing the next. It’s almost impossible to know how much you have.
So, while I don’t have those beautiful, silver women in their flowy gowns in a tangible form anymore, I keep my checkbook balanced and try hard to stay within my means.
-—stay curious! (and responsibly generous)