Use Cash
When Broke, Limit Your Check Card
By Daniel Muniz

Like so many modern consumers, I rarely carried cash or my checkbook. The same was true for a number of my peers, co-workers, and friends. Years ago I resisted the growing trend to use a check card mostly because I still felt comfortable with writing checks and using actual money. Not that I disliked the technology behind the plastic, but I just didn’t see a need to change my habits.

But once I discovered how easy and convenient it was to get my transactions done with a bank card, I was hooked.

For instance, I didn’t want to wait in a long line inside of a gas station when I could quickly use my card to pay at the pump and then be on my way. And using a card is just so much faster compared to the hassle of writing out a check for groceries at the supermarket or at any other place.

Also, many of the cards, like the ones issued by MasterCard and Visa, provide protection against theft with a zero or limited liability policy if they are ever lost or stolen. In addition, the issuer of the cards can also act as a middleman if you have a dispute with a vendor on a purchase.

And there are plenty of people who enjoy being able to track every dollar spent by looking at their statements. The cards provide a simplistic but powerful paper trail where you can examine every transaction and even download it to your computer. There is no true paper trail with cash unless you are the type of person who likes to tote around a fist full of unwieldy receipts.

In fact, I personally know a lot of people who use a credit card to pay for everything. As a result, they are able to collect a staggering amount of reward points, frequent flier miles, and other bonuses from their credit issuer by simply using their credit card for every purchase. And at the end of the monthly cycle of the card, they simply pay off the entire balance. This fanatical use of plastic also allows a vivid insight into spending habits.

But it also requires an enormous amount of discipline to ensure that you remain within your budget so that it can be paid off each month. And I wouldn’t go that far in tracking my transactions because I don’t have much money to start off with so there really isn’t much to analyze.

After using my check card for a long time, I even began to chuckle at the notion that I finally succumbed to being in the electronic age of plastic in which I no longer used physical cash. I loved it and I wasn’t alone. The number of people using debit, credit, or prepaid cards has soared so much that plastic has now become the primary choice of consumers for the past few years.

Below is a breakdown of the usage for in-store transactions from the American Bankers Association:

Unfortunately, I am also a paycheck to paycheck man so a harsh reality eventually crashed around me.

It didn’t take long to run into the same pitfall that other people have with using bank cards. In essence, just because you have a check card does not necessarily mean that you have money available in your bank account. The bank card made it too easy to spend money that you don’t have.

And when it became convenient for me to use my card, it also became too easy to neglect keeping track of all my transactions, thus I began to run out of money faster than ever. As a result, it didn’t take long to put the brakes on the bank card. I simply had to stop using it.

Other friends of mine had serious problems with their spouses using a check card at the same time for different purchase with each person thinking that they had plenty of money available.

It would have been a different story for me if I actually had money left over from each paycheck but I don’t.

And there are plenty of people who are in a similar situation. For instance, I am the sole breadwinner in my family because my wife stays at home with the baby; therefore my finances are always going to be a bit limited.

Consequently, I returned to using physical money and writing checks.

I don’t like carrying around a big wad of cash so I just take only the money I need and that arrangement has worked out really well for me, which wasn’t much different before I started using my check card. And you cannot spend what you don’t have so I am now so much more cognizant of my money management.

And that methodology brought sanity back into my finances.

I still use my check card for convenience, like at the gas pump, but not for much else.

All of sudden, much of my anxiety over my money went down mostly because I had so much better control of my finances. I am not upset at my experience with the check cards. I just realize that for the time being, they are not for me. And of course I still have my credit cards. Revolving credit is always important to have and to exercise responsibly because everyone needs to be able to maintain good credit scores.

Perhaps someday I can transition myself into a system of using a check card or a credit card for every purchase. But until then, cash in my wallet is just fine.

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