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Cash payment can be an enjoyable, financially wise move that many professionals recommend. According to a Federal Reserve study in 2021, cash transactions represented 26% of all consumer spending — so cash isn’t going away any time soon.
Dave Ramsey, a money guru, often points out that physically cashing out psychologically makes you more careful. Cash, he emphasizes, will keep you in control of your expenses and avoid debt. Read on to discover 16 key purchases where cash is king.
Groceries
Buying groceries with cash can save you money. Cash-paying individuals spend an average of 12-18% less because they control their budgets more.
Also, there is no time for impulse purchases when you have an exact amount in your wallet!
Dining Out
Dinner out can quickly drain your bank account if you aren’t careful. When you pay in cash, you are likely to remain on track and don’t feel the urge to get dessert or drinks.
Cash always keeps you accountable and conscious.
Travel Incidentals
U.S. tourism numbers for 2021 suggest that 93 million Americans visit foreign countries annually. The average American spends about $1,890 on an international holiday.
The cost of travel can add up quickly, be it an airport snack or a quick souvenir. Carry cash to manage your money while you travel.
Clothes Shopping
Retail therapy or style update, whatever you know it as. Many people often don’t mind spending too much money on clothing.
Pay with money, have a reasonable spending limit so you only buy what you really need (and maybe a small indulgence).
Entertainment
Movies, concerts, and events are fine until you see your bank account. Movie tickets in the U.S. are usually about $10.
Cash makes you limit how many experiences you can get away with. This way, you can have a blast but not overdo it.
Coffee Shops
The coffee habit every morning—a small price to pay! An American pays an average of $21.32 per week for products in a coffee shop.
Your caffeine quest doesn’t overrun with cash, making you reconsider that second cup or the pastry you’ve been eyeing.
Small Local Businesses
Paying in cash is a convenient alternative for most small businesses that do not want to incur credit card processing charges.
Cash pays locally, which also translates into better customer service and discounts too.
Farmers Markets
Farmers markets are the perfect thing to do on weekend mornings.
Sellers are usually looking for cash, and you might even be able to score a piece of fresh produce at a discounted price by negotiating directly.
Tips
Most recently, Finder found that around four out of five Americans tip after being served. Restaurants receive the largest tips, with 15-20%.
Tipping cash enables you to get the entire amount, and no processing fee comes ripping off your income.
Gasoline
There are petrol stations that will serve cash payers at a discount. Avoid credit card interest and make the most of these savings by showing up at the pump with cash.
Paying by cash is also a good way to stay safe from skimming schemes.
Haircuts and Beauty Services
For men, a haircut costs on average $25-45 and $45-75 for women. Tipping in these services is common, so it’s a win-win situation if you can make cash.
You control your budget and give the expert their full amount.
Home Maintenance
A study from Harvard University found that homeowners devote approximately 9.6% of their income to home care annually.
For small home repair or upkeep services, paying with cash sometimes entitles you to lower rates from businesses that would rather not charge your card.
Gifts
It is easy to get caught up in the season when buying gifts. Keeping it simple with cash helps you stay within your means.
It forces you to spend prudently.
Kids’ Allowance
The median allowance for a child is $30 per week (or $1500 per year), according to a survey from the American Institute of Certified Public Accountants. Cash is a tangible way of teaching kids money management.
They can actually experience how much they have when you make their allowances in cash.
Parking Fees
Parking rates are high in the big cities. Monthly parking in New York, for example, is $443.51, and $300 in San Francisco.
Cash parking rates may be less for meters and lots. Besides, with cash, you don’t find yourself with an unexpected fee on your next credit card bill.
Personal Goals
When you’re budgeting for something particular or private—a new gadget or a lifetime vacation—saving cash in an envelope is a strong motivator.
Seeing the pile increase is satisfying and keeps your destination in sight.
Disclaimer – This list is solely the author’s opinion based on research and publicly available information
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