In the era of increasing digitization, living a cash-only life might sound impossible, because we heavily depend on credit cards, debit cards, online wallets, and internet banking. For making any purchase, we have come used to these modes of payment as it is more secure than carrying money in the wallet. What’s more, many are attracted to the benefits that come with a credit card.

However, these benefits come with several hassles as well – the loss of card, identity theft, fraudulent transactions, annual charges, and stolen customer information. It is important to remember that ATMs have only been around for a few decades, but cash has stood the test of centuries. Thus, it should come as no surprise that a small section of the population is moving back to a cash only life.

What is cash only life?

As the term suggests, in a cash-only life, a person has to stop using their debit and credit cards and rely only on cash for all their purchases. This might seem impossible in a time when having credit and debit cards is a child’s play, but with proper financial planning, a person can have a cash-only lifestyle. Usually, it begins with setting a monthly budget and at the month-end, whatever amount is considered as savings. Initially, in the first few months, it might feel difficult, but in the long run, it will be beneficial because there will no longer be any credit card debts or impulse purchases made using a debit card. A cash-only lifestyle will set a limit for the household expenditures and curb down the unnecessary expenses which people often engage in when using cards.

Even in the age where a majority of the population prefers plastic money, few believe in cash only lifestyle. This doesn’t mean they pay everything via cash; instead, this type of payment mode helps them keeping financial stability in life. There have been incidents of loss or theft of credit and debit cards, which can be prevented by living a cash-only lifestyle.



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Pros and Cons of cash only life

Cash Only Life

Before the internet took over our lives, cash only living was the only way mankind knew how to live. However, today, various options are available such as debit and credit cards, Google Pay, PayPal, Paytm, and different other options. Let’s take a look at the pros and cons of a cash-only life.

Pros of a Cash-Only Lifestyle

  • Reduction in unnecessary expenses

While using paper currency, a person pays the amount which is available in their wallet at the moment. Thus they consider products within their range and do not overspend.

  • Efficiency in handling finances

Cash only lifestyle enables in restricting the monthly budget and keeping a tab on the amount available in the checking account. Thus, it helps in monitoring one’s financial detail along with contributing to a necessary backup required during emergencies.

  • Living a debt-free life

Credit cards are debt instruments, and the money you spend using them has to be repaid, often with interest. However, in a cash-only life, this is not an issue as there is no form of debt.

Cons of a Cash-Only Lifestyle

  • Misplacement of cash can cause havoc

Withdrawing money from a bank account is no hassle, but if it is stolen or misplaced, it cannot be tracked. The disadvantage of cash is that they don’t have a digital notification; hence, once it’s gone, it’s usually gone forever.

  • COD is not a viable option for several e-commerce sites

While making an online payment on an e-commerce site, many times, the cash on delivery option is not applicable. Hence, you are forced to pay using your card in this case.

  • Missing benefits of credit cards

Several credit card companies offer cash-back opportunities, which will be missed if a person uses only cash only lifestyle. Furthermore, most online portals and websites require a credit or debit card for making big-ticket purchases like a plane ticket or mobile phone and offer discounts on the same.

Real-world examples of people living a cash-only life

There is a real-life incident of a person who is currently living a cash-only lifestyle. Bridget Delany’s landlord was a wealthy elite who had invented the first electronic card payment system Eftpos. Long before ATMs came into being, people had to travel to the bank for withdrawing cash, but with the advent of the automated payment system, it seemed that only the poor used paper currency. So Bridget got her first credit card 20 years ago and ever since her expenditure was rising as it was simply ‘tap and go’ mode of payment. However, recently after losing her bank card for the fourth time in a year, she had decided not to issue a new one and hence walks up to the bank every Friday, takes out a certain amount of cash to survive the week. It is tiring, but she has seen a reduction in her expenses and an increase in savings.

In another example, Janessa Jackson has been living only cash life to fulfill her financial goals, curb expenses, increase savings and avoid the steep downfall of money from a savings account. After watching the Dave Ramsey envelop method of saving money, she started following baby steps of avoiding credit and debit cards and using the only paper currency for meeting her needs. In 2 months, she began seeing results as she has been able to save a subsequent amount of her finance.  Cash only lifestyle helped her realize where he was spending most and made her understand that with proper budgeting strategy, she can save more. It also helped her set his financial priority rather than fulfilling unnecessary wants.

How to start living a cash-only life?

Living cash-only lifestyle forces an individual to limit their expenditure and enhance their budgeting skills, thereby enabling them to live a debt-free life. Paper currency often aids an individual to become a conscious spender who can resist impulsive expenditure and spend only on necessary things. Here’s how to get started on a cash-only life:

  •    Keep cards at home

The first step towards living cash-only life is to carry only cash while going outside. This will resist a person from overspending and limit their purchasing power. Besides, one must strictly avoid usage of credit cards as will result in a debt, which is against the idea of cash only life.  

  •    Create a Budget

Calculate your monthly expenses and earnings to devise a suitable budget. Besides using the envelop system to improve financial stability, it is imperative to deploy a prudent budgeting strategy. A budget helps a person manage their spending and savings easily. Make sure you stick to your budget every month and see your savings soar in a short time.

  •    Differentiate between wants and needs

While using cards, often people don’t bother about their financial situation and keep on purchasing unnecessary things. However, with a cash-only lifestyle, a person can learn to identify their needs and wants. Thus, they become keener on purchasing they need rather than fulfilling their luxurious and dispensable wants.

Things to remember while living a cash-only life

There are a few things that you must be careful about before starting to live a cash-only life:

  •    Carry cash carefully

The first step towards living a cash-only lifestyle is by carrying cash whenever you step out. This helps in keeping a check on the amount a person has in their wallet and spend accordingly. However, as lost or misplaced cash cannot be traced back, one must be careful in handling it. Count the money twice before you leave, before you make a payment and before you pocket the remaining change. Keep your cash safe while traveling in crowded places.

  •    Be flexible

Some establishments or businesses might no longer accept cash. Be flexible and use your card, but clear all your dues as soon as possible to prevent any debt from accumulating.

  •    Set a cash limit

While you can withdraw any amount of cash from banks or ATMs, but it is imperative to use it wisely. Before becoming a conscious spender, a person must keep a limited amount of money in their wallet to avoid unnecessary expenditure. Once you get the hang of it, you’ll be much more comfortable with handling high volumes of cash.

  •    Keep a tab on day-to-day expenses

Using the envelop method can aid in categorizing the income and save them for various expenses such as household, transport, clothing, etc. However, besides that, there are certain day-to-day expenses which a person bears. So, make sure you have an adequate amount of cash and that you know where it is being spent.

Living cash-only lifestyle doesn’t require a person to become ascetic nor be a financial genius; instead, all it needs is careful financial planning to live a debt-free life. Stepping out of the vicious cycle of credit or debit card can seem perilous initially, but in the long run, it proves beneficial as one learns to differentiate between their needs and wants and focuses curbing unnecessary expenses. Thus, it involves dedication, budgeting strategy, and planning to live a cash-only lifestyle. However, those who are successful can reap the benefits with come with it.



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Shivam Abrol

Shivam is a passionate content writer with Masters in journalism. A mutiple-award-winning writer, he brings over a decade of experience as a BFSI writer. In fact, he himself is known in his circle for sound financial advice. A writer by day and a reader by night, Shivam enjoys researching and writing on various financial topics, including credit, stock market, crypto, taxes etc. When he is not spending his time penning down an informative article or opinion, he can be found playing with his kids or collecting stamps.

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