Has Cash Lost it's Value?
How long does your cash last? I just returned from vacation and was shocked that I had spent a lot of money, but only used about $10 in cash. I believe my most common use of cash is paying my $6.00 golfing bets every week. (I usually lose!) Our Australian contributor has reflected on the virtues of having a cashless society. I find her perspective very entertaining and interesting.
In 2017, Australia is "banking'" on a cashless society. But, is this for the best?
Over the past decade, the concept of living in a cashless society has moved from the sci-fi sphere to the realms of reality, at an ever-increasing pace. In fact, "over the last six years the amount of cash used by Australians has fallen by roughly one-third" (Holden, 2017). Australia has been a world leader in embracing chip-card technology, allowing a quick tap of a credit or debit card to pay for services including transport tickets, parking meters, and roads tolls (Holden, 2017).
My 72-year-old father loves handling cash. Each payday, he withdraws a few hundred dollars, which he then distributes to paying electricity, phone and gas bills (in-person at the post office, might I add!). He keeps some money for groceries, gives some spending money to my mum and spares a few dollars for a punt on the horses on the weekend. He is excellent at budgeting. Probably because he makes a physical connection with his dollars. Unlike me, he can see where his money is going.
More often than not, I am now going from one payday to the next, without ever withdrawing cash from my bank account. However, it is not as though I am not spending any money. Quite the contrary. I am spending senselessly. Despite the fact that technology, smart phones, and banking apps means our expenditure is more transparent than ever, I still don't' realize when and where I am spending so much.
I belong to a generation that has a debilitating amount of credit card debt. In fact, according to a survey conducted by Rent.com, more than three-quarters of renters between the ages of 18 and 24 spend more than they earn every month. (White, n.d.). While I sadly no longer belong to the 18-24 year age range, I am still feeling the pinch of overspending in my twenties. I only wonder if this cycle of lavishness and lack of accountability for our actions has something to do with being a product of a cashless society?
I decided to track my spending (both cash and electronic) over a single day period. Here's a glimpse of my cashbook. (A cashbook is a record book that people used to use in the olden days to record what they earned and spent. Nowadays, we can retrieve every incoming and outgoing transaction from our account at the press of a button on our phones anytime, anywhere.)
My Cashless Day
6:30 am – My iPhone alarm goes off. My iPhone that doesn't cost a physical cent (or so it feels) as the cost of all calls, texts and internet are bundled into a neat package that the phone company directly debits from my bank account each month.
7:00 am – I eat breakfast cereal, thankfully with in-date milk, courtesy of a supermarket delivery truck. When I was a child, I remember I would be responsible for placing the "milk money" in an old ashtray on the front step of my house for the milk man to collect when he did his milk run. Unlike these times, I didn't have to leave any cash for the supermarket delivery truck driver. My grocery store account with my VISA details attached to it had my back.
7:30 am – I drop my daughter to day-care. It doesn't cost a dime to enter the door as I am invoiced for the fees each fortnight and I pay by direct deposit.
8:00 am – I drive to work, heading over two toll bridges. My car is equipped with a device that is attached to my windscreen and beeps when my toll balance is low. It is automatically topped up by a card that is attached to my account. I wish I could remember which card I attached!
8:30 am – 3:30 pm – I work as a teacher. For lunch I head to the tuckshop and swipe my staff ID card in store to pay for my lunch.
4:00 pm – I stop at the petrol station where I swipe my EFTPOS or credit card at the bowser, prior to filling, removing the need to head inside the store or speak to an assistant at all.
4:30 pm - I head to the gym and can enter the premises without speaking to anyone or paying a thing. My gym membership is automatically debited from my account each month.
5:30 pm – I arrive home and use an app to order take away food delivered. The takeaway is paid for via the app, which means that no cash changes hands as the delivery guy hands my Thai takeaway over at my front door. Win!
6:30 pm – There is a knock at the door (again!) and it is a Charity collector. They are collecting for Surf Lifesaving, which is a worthy cause, especially in Australia as we are surrounded by coastlines. I tell them I will pop upstairs to get some cash from my wallet. For the first time today, I WILL use cash! They respond, "We don't actually accept cash, we only accept credit card details with a monthly payment".
I decide not to worry about donating at all, given the time of night and the nature of the collecting process.
Money is still money, isn't it?
Or has cash lost its value?
Perhaps only time will tell! India has already phased out its largest cash bills (Durden, 2017). Harvard professor and former IMF chief economist, Ken Rogoff, maintains in his book, "The Curse of Cash", that the gradual elimination of cash, starting with large bills, is best (Holden, 2017).
By 2020, Australia could really be cash-free.
Durden, T. (2017, March 3). Is The Tyranny Of A Cashless Society Coming? Retrieved from zeroedge.com
Holden, R. (2017, January 3). Why A Cashless Society Is Coming. Retrieved from afr.com:
White, M. (n.d.). Today's Young Adults Will Never Pay Off Their Credit Card Debts. Retrieved from Time.com: