Casual Cash

Those physical bills you’re carrying in your wallet. Or those crumpled in your pants pocket. Or those meticulously organized by denomination and secured with a monogrammed money clip.

If you’ve read any of my other articles, you know I am big on tracking where your money goes. But cash is tricky. What are you spending that cash on?

Maybe the pandemic has rendered this topic mostly moot since fewer people want to use germy paper bills. But on the chance that you still use cash or that cash will stage a comeback, I want to talk about its place in your financial life.

There is a budgeting system designed around using only cash to pay for things. The goal is to limit spending to the physical bills in your hand. But what if cash spending becomes a black hole instead of a limiting tool?

How much is ‘casual cash’ draining your financial resources? What percentage of your spending is difficult-to-track cash? If it’s a small percentage, it’s fine to track it as a miscellaneous expense in your budget. But if you use a lot of cash for, let’s face it, typically discretionary purchases, it becomes an abyss of “where did my money go?”

Oh, but you’re saving receipts from your cash purchases for your end-of-month personal financial review. You’re fine then.

For those not so meticulous, I’m going to suggest the crazy notion of using less cash in favor of a debit card. The primary benefit is easier monitoring of your spending, which pays dividends when building new money habits.

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