Do not go Cashless.

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We are collecting cash: we are not Luddites, and much of the banking in NZ is online. But having cash is good: there are some times when the system falls over. In NZ, our government is trying to get us not to use cash because of COVID, and there are underlying nefarious reasons relating to control.

There are other reasons. The main one is that I don’t see a computer file, and my bank often delays moving the balance, so I think there is more money than there is. If times get tight, use cash — if you have $30 for coffee for a week (six cups of joe here) you will know that is six days and the seventh you better make it yourself.

Cash carries more emotion for buyers. The loss when making a purchase is felt immediately. As CEO of a ministry that tries to help people steward their money, I’ve seen people improve their spending habits due to the psychological effect of using cash.

We’ve seen the use of cash discouraged and even refused by certain vendors. However, cashless stores were banned in San Francisco, New Jersey, and Philadelphia on the grounds of discrimination.

These factors could either propel or delay the push towards going cashless, so don’t make a determination too quickly one way or the other.

So, the envelope system works if money is tight. It does not work when most invoices are electronic. For instance, my phone is being repaired, and the option to pay (as it is with my parking fines) is credit card or electronic transfer.

Yes, there is pressure here, because if you have to use an intermediary you can be unplatformed.

Although disturbing, some are concerned with the government “unbanking” political enemies. Government control would also eliminate those who hoard cash or drop out of the financial system. The idea of the government being in control of all citizen money is concerning.

Protection is important. Supposedly, digital wallets are more secure than debit and credit cards because only the wallet providers see your information. Passwords and biometric authentication (retina scans, face, fingerprint, and voice recognition), auto-lock screens will be imperative to protect phones and accounts. This leads to even less privacy and ultimately less freedom once your biometric ID is used for all online access.

Firstly, get your debt down. Then get some cash as emergency money. If the power goes, so does the ATMs.

Use cash for routine, small transactions. Keep the electronic stuff for things that have to go through the taxman or when it is too complicated use cash.

At present, blockchain systems don’t work here. Yet. It is a matter of trust.

Historically, citizens have turned to alternatives of fiat currencies when the buying power of their government-created payment method weakened drastically due to inflation. While commodities such as gold continue to be a popular choice for wealth preservation, these do not provide much utility for day-to-day expenditures. Instead, consumers have often turned to bearer instruments issued by other nation states. In some instances, a country may even move to the drastic measure of abandoning its sovereign currency in favor of another country’s money — as is the case with Ecuador, East Timor, El Salvador, Marshall Islands, Micronesia, Palau, Turks and Caicos, British Virgin Islands and Zimbabwe; according to the CIA’s World Factbook, all the aforementioned countries, list the U.S. dollar as official currency today.

While the global digitization of currencies has seemingly created a level playing field for the world’s fiat money, consumers are reluctant to adopt a new language of trade. When a local currency shows strong signs of failure, citizens are most often turning to a seemingly ubiquitous form of cash such as U.S. Federal Reserve Notes.

Always have some local currency. Have real assets. At present our interest rates are less than inflation, but get some safety money — and make sure some of it is in other denominations or gold.

Because the government is not that reliable.

One thought on “Do not go Cashless.

  1. Agreed. if you have cash (or specie, or bullion, or any medium of exchange), you are not reliant on electricity, phone lines, websites, or the consent or involvement of anyone outside the transaction. And since you have it in hand, it is better for budgeting.

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