by Katerina Nikolas

Created on: February 14, 2010   Last Updated: September 06, 2011

Society  today is entrenched in the credit culture with the idea of using cash having been lost along the way. Within decades credit cards have become a must have accessory, bearing a plastic air of sophistication. The expansion of credit and loans has led to many people spending more than they can afford and feeling entitled to having things now, instead of saving for them. This naturally leads on to massive debt as interest is added to the original sum spent. Before they know it many people are living beyond their means. When cash ruled the day people had much more control of their finances.

In modern society dealing sensibly with personal finances, in many cases, seems to have gone out of the window. People are at the mercy of their credit scores, and when they score badly resort to borrowing money at exorbitant rates from cash advance loan stores. It is a culture ruled by the need to have everything now. The concept of using cash is almost lost, as the banks advertise the benefits of using credit instead. Using credit ultimately means one thing; you are spending what isn’t in your pocket at that moment and funding today's purchases with tomorrow's earnings.If you stick to cash you simply can't spend above the amount you have which is a great way to take back financial control.

Debit card payments directly from your bank account are the equivalent of paying cash, as you can keep an easy record of exactly what funds you have available, and make a note each time you use your debit card. You can keep an up to date tally of the current funds available. Using debit cards instead of credit cards saves money in the long term unless credit card balances are always paid off in full each month. Debit cards are an excellent alternative to actual cash for those who do not wish to carry cash around, for fear of having it stolen.

The benefits of using cash are that you cannot possibly be tempted to go into debt. If you don’t have the cash to pay for something, you don’t buy it. If you end up with a cash surplus balance then add it to your savings at the end of the month. Establish a pattern of saving so that you have a safety net in the bank.

I live in Greece and so far we are still a cash nation. Obviously we use banks, but one is just as likely to see people depositing cash into the bank, as withdrawing it. Credit has not caught on yet. People aren’t judged on their credit score. Although the countries finances are in a complete mess, and many people struggle financially, the personal debt trap has been avoided. People who haven’t grown up used to credit are not going to be seduced with the idea of credit very quickly.

When the banks do start to bombard us with their heavy advertising campaigns for credit cards, families are going to be there advising against their use. Traditions are still valued here so if cash was good enough for previous generations then the next generation will be brought up thinking the same. After all we know the way American society has become so credit reliant to show as an example of how credit affects peoples lives.

Cash has worked for centuries and can still work today. I can advocate it as a way to live, as I previously lived in a country which was becoming reliant on credit. The idea of paying in cash felt strange at first, not least because I wasn’t used to carrying it. I was a debit card user as I worked in finance, and knew exactly how the credit industry worked, and it wasn’t to help the consumer. Now that I’ve experienced both styles of living, credit and cash, I would say that paying cash for everything is not a bad strategy.

Learn more about this author, Katerina Nikolas.
Click here to send this author comments or questions.