Back in July, I read The End of Money, a book about phasing out physical currency in the developed world. The author gives numerous reasons that he believes it’s in everyone’s best interest to go ahead and shift to using cash as little as possible. As one who tries to implement truth and practicality whenever I encounter it, I was intrigued. For me, there could hardly be a larger shift in the handling of my day-to-day finances; I’ve been using a cash-based envelope system for my entire adult life. Could I make the jump to transacting and tracking all of my expenditures electronically? Would it be that much more convenient and helpful? I decided to try it for a couple of months.
Being somewhat tech-savvy, I first sought out the right tool for the job, ultimately landing on Mint.com due to its good reviews and easy-to-use mobile app. Within a few days, I had connected all of my accounts with their read-only system, even my HSA which I never check due to the credit union’s subpar online banking. I have to admit that it was quite nice to see a full financial picture in one place for the first time. Prior to integrating with Mint, I had to log into four or five different sites to check balances, and if I actually cared to sum any of the figures, that was up to me. With Mint’s mobile app, I could easily see daily fluctuations in retirement accounts (for better or worse), and their basic analytics even showed that my portfolio has drastically underperformed the major indexes this year, a fact that I would never spend the time to unearth myself. So far so good. This cashless thing may work out.
When it came time to port my budget over to Mint, however, is when I felt the first friction. Perhaps rightfully so, everything in Mint revolves around “the month.” Budgets are created for the upcoming month with expected income declared and expenses divvied into numerous categories. This may work fine for someone who gets paid bi-monthly, but I currently receive my paycheck every two weeks, meaning my income will seldom, if ever, fall at the beginning and end of the month. Because their system of tracking expenses focuses on staying “in the green,” I would start off in the red immediately. You don’t get paid until the 6th this month, but you spent $10 at Chipotle on the 2nd? You, sir, are in the red, regardless of the balance in your checking account. To say this is annoying is putting it lightly. Though it would be a foundational shift to their system, allowing users to set budgets for specified date ranges would make a world of difference. In my case, it would make the tool actually useful.
The other hurdle I encountered in using Mint was the delay in posting transactions. When spending cash, it is literally instant; you can see the bills dwindling in your wallet each time you visit the grocery store or a coffee shop. With today’s financial network (which stems from the 1970′s), it often takes three or four days for “credit” transactions to clear. This is a big problem for someone trying to make the most of their income. Unless one wants to keep a tally of expenses in his head (which defeats the purpose), there’s a tendency to be overly-cautious or overly-carless. Frankly, I took the latter approach. Once the mess of delayed transactions in Mint seemed too difficult to reconcile and untangle, I kept telling myself I would figure it out later. That time never came, and I still haven’t fully pored through bank statements to assess the damage done. Suffice it to say, I know that I overspent considerably on restaurants and other social fun.
A final consideration, one which Wolman mentioned in his book, is that spontaneous generosity is seldom possible. Were I to come across someone selling a street paper or in need of a couple dollars, I was effectively powerless to help. It became all too easy to give the calloused response, “I don’t have any cash. Sorry.” While I try to be judicious in giving money to strangers, I found my heart becoming hard due to not even having to wrestle with the thought. In a sense, carrying no cash distanced me even further from those in need, shutting down the conversation before it could even begin. “Suppose you see a brother or sister who has no food or clothing, and you say, ‘Good-bye and have a good day; stay warm and eat well’—but then you don’t give that person any food or clothing. What good does that do?” (James 2:15-16). Coupled with the reckless spending I fell into, I did not like who I was becoming. Swiping my card all over the place and budgeting via mobile app, I became too hip, self-indulged, and uncaring.
So where does this leave me? As of my last payday, I made the ritual trek to an ATM and withdrew the cash I would need for the next two weeks. Ultimately, my attempts to go cashless left me feeling out of control, both in the sense that it was too easy to spend carelessly, and in the sense that I invested much more time managing money day-to-day, my finances effectively controlling me. I have returned to my trusty Google Docs spreadsheet whereby I spend five minutes each payday allotting funds, withdraw the necessary cash, and have few worries as I open my wallet for the next couple of weeks. Simple? Sure. But it works, and ultimately, going cashless did not work for me.
Until financial systems are advanced enough to eliminate transactional lag, until there is a well-integrated budgeting tool which is flexible enough to fit any situation, and until those in desperate circumstances are able to deal in money electronically, I will likely be carrying cash. The truth is that I have always done a hybrid system, paying many bills online and being paid via direct deposit, and I imagine that most people do. At this stage in the game, it doesn’t make sense to be an extremist and eliminate cash, even if that’s where society ultimately ends up.