Money Matters: Pros and cons of using cash

Reported by: Brittany Price
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Updated: 7/02 10:14 am
How often do you find yourself without a trace of cash? 

It's not uncommon in a convenience-based world, but carrying around your currency comes with advantages. 

"When you pay with cash you are more disciplined in your spending. Research has shown that people spend differently when they use plastic than when they do when they use good, old, American, cold-hard cash," Certified Financial Planner, Jennifer Dever, said.  

Dever said it makes spending more tangible. 

"I think it's a psychological accounting of what you've spent," Dever said.  

Using plastic tends to impact our habits in a different way. 

"We tend to overspend, spend beyond our budget, when we use debit cards and credit cards," Dever said.  

With identity theft surging, there's serious concern using cards. 

"The dangers are that the information is going to get ripped off. We've heard the Target story," Dever said.  

However, when you lose cash it's simply gone. Cards come with safeguards. 

"There is some protection against theft or loss. If my debit card is lost or stolen I'm only responsible for $50 of fraudulent charges," Dever said. 

There are more advantages to using debit or credit.

"Many of them come with rewards: hotel rewards, rental car rewards, cash-back rewards, airline miles of course is a big one," Dever said.  

Dever said there's no real disadvantage of using cash, just the inconvenience. 

"To have cash, you have to go to the bank to get the cash, carry it around and be mindful of where it is," Dever said.  

There's no problem swiping plastic, but do so with discipline. 

"Not to spend outside of your means and pay those credit card charges at the end of the month," Dever said.  

Whether using cash, credit or debit, Dever's overall advice is to be intentional about your spending and stay within your means. 
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