Paper or Plastic – Manage Money Better

Info at Info

cut cards We are faced with this question almost on a daily basis – Should I use paper or plastic to manage my money? Credit cards and debit cards are an incredible source of convenience. Having those items in our wallet probably saves us a few hours each week but they also cost us a lot more than we even realize because of a number of reasons. Are you are still trying to decide what’s better for you? There are pros and cons to both.

SAFETY: I’d have to say that cash is almost perfectly safe when compared to credit or debit cards.

PAPER: If you go directly to your bank for money it is 100% safe. Banks do a fine job of destroying counterfeit money to prevent it from winding up in our hands. If you don’t use a debit card, you have to go to your bank to take the money out and there are no user fees. The tellers will recognize your face and the chances of someone removing money from your account are pretty slim.

PLASTIC: It is fairly safe but it is a common misconception that you will be saved from fraudulent activity. You may, in time, be reimbursed by the company but you may have to carry that balance until the matter is resolved. How could you possibly cover $5,000 or $10,000?

BUDGET: Cash wins again. Cash helps you create a budget and plan your spending. Here’s a typical day:

PAPER: I go to the grocery store. I have to plan what I need first. Eggs, butter, milk… Since I am going grocery shopping I guess I should pay that parking ticket for $20 and then I’ll rent a movie for $5. I know I will need $75 for the day so I will take out $75. If you make a list and will probably go by that list. Cash forces you to plan.

PLASTIC: I’m walking through the aisles picking up what I think I need. Hmmm that bag of chips looks pretty good. I’ll get the dip too! Do I need ketchup? I’ll get some just in case. I totally forgot to pay for that parking ticket. Now it’s late and doubled in price. Maybe I’ll rent two movies tonight. I’ll put it on the credit card… $120 later… Does that sound familiar? Credit cards can give us a free for all mentality.

SECURITY: Credit cards may take the cake on this one.

PAPER: Life is unpredictable and some purchases are a must. If you have a major expense such as your car breaking down or you are going to buy a new computer it isn’t always the best idea to use cash. I wouldn’t want to walk into the garage or computer store with $2,000 in my wallet.

PLASTIC: You need a new timing belt for the car? You want to treat your spouse to a fancy dinner? Swipe the card. If you have properly managed your money you can be prepared for those unexpected purchases. In this instance credit cards provide us with a little security to know we can easily make those major purchases.

Cash has been around for, well thousands of years. It is, for the most part, safe, reliable, easy to use, easy to lose, hard to earn and always burning a hole in our wallet. I know many people (myself included) who have misplaced money. The tough part is that once it’s gone, it’s gone forever. I also know a lot of people (myself included) who have accidently spent more than planned. You take out a hundred dollars and the next thing you know it’s gone and you have a wallet brimming with receipts for all kinds of items you wouldn’t have normally bought. You can prevent that from happening if you plan out your purchases.

In a way having a credit card is like having $10,000 of someone else’s money. That’s where the danger of credit cards lie and that’s how many people get into trouble. Having a credit card is like having an endless supply of cash. Having continual access to your bank account with a debit card is slightly safer but it can still cause major over spending.

If you budget your daily spending with cash it’s impossible to let it get out of hand. Basically you can’t spend it if you don’t have it. My advice is to lose those credit cards (maybe keep one for an emergency) and start to rethink your budget. The next time someone asks if you want paper or plastic use paper mange money better.

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