The Cash-Only Trend Gains Momentum: Why Physical Money Is Making a Comeback
A completely cashless society might be looking a long way off after all, as the cash-only trend gains traction across generations. While older generations remember a time when cash was king, younger people are now embracing physical money for its inclusivity and practical benefits.
Why Younger Generations Are Turning to Cash
Simon Phillips, managing director of No1 Currency, observes that the younger generation is learning what older generations practiced for decades. "People are putting cash first to enable them to budget better, have more intention, and be more mindful with their spending, whether that's at home or on holiday," he says. This shift is driven by a desire for better financial control, especially in an era of rising costs.
Pros of Using Cash
Reliability During Banking Glitches: The European Central Bank encourages keeping cash at home as a backup. Banking app failures or system outages make physical money a reassuring fallback.
Effective Day-to-Day Budgeting: For those on tight budgets, carrying exact cash amounts prevents overspending with cards. Phillips notes, "It is much more difficult to budget without physically touching cash."
Security Against Fraud: Cash is less vulnerable to card fraud. Phillips applauds banks for maintaining the £100 tap-and-go limit, saying it reduces the risk of unauthorized spending.
Usefulness Abroad: In many countries, cash remains essential. Phillips advises travelers to always carry multiple payment methods, as not all destinations support card payments everywhere.
Cons of Using Cash
Limited Access: Many retailers have gone cash-free post-Covid, and bank branch closures make depositing cash challenging. Finding fee-free ATMs can also be difficult.
Poor for Savings: With high inflation, keeping large sums in cash reduces their value over time. Phillips warns against storing life savings under the mattress, recommending interest-earning accounts instead.
Privacy Considerations
Cash offers more privacy by avoiding data tracking from big tech companies. However, Phillips doubts this is a practical reason to go cash-only, as most online retailers require card payments.
Conclusion
The cash-only trend highlights a renewed appreciation for physical money's role in budgeting and emergencies. While not suitable for all financial needs, it provides a valuable tool for mindful spending in an increasingly digital world.
