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I have been talking lately about all of the effects of the current economy, but there are also some positive affects that you may not realize.

As people max out their credit cards or realize that the high interest rates make the cards not worth using, more and more people are turning back to good old cash.

 

For most of my adult life, I refused to carry cash.

You see, I grew up in a tough neighborhood where you could get your bag snatched at any moment. You really could, and my mother, sister, and grandparents have had this happen. I was never mugged in this manner, but I did lose a couple of purses myself over the years. Because of this, I have always felt that it was better to carry cards that you could cancel instead of cash that you would never see again. This meant I have only used debit cards, credit cards, and checks for most of my adult life.

There are many hazards with using cash substitutes though. Users of these alternate methods of cash have to pay bank fees, interest charges, service charges, and if they make a mathematical error, the fees can be exorbitant.

In addition, using a cash substitute can make a person blind to how much money they are really using. I have found that I am less likely to make that impulse purchase if it will lower the amount of cash in my wallet. Additionally, many money-management classes will teach people who have trouble-managing money to use the Cash Envelope System of money management.

I am not recommending that you stop using banks. Banks are good… for savings and paying basic bills. But for shopping, and day-to-day needs, cash is the way to go.