No one can deny that credit and debit cards have made life much easier and brought a lot of convenience in the way we do our day to day transactions. However, much of this convenience still does not outweigh the benefits that came with cash transactions.

Here are 6 advantages of using cash.

1 cash is accepted everywhere

In as much as credit and debit cards are popular among many vendors, it is worth noting that no all vendors accept them. However, no vendor will turn you away if you have cash. There are vendors who still want to touch and feel money, or some who feel that it’s not necessary for their businesses to incur the extra cost of equipment to handle credit or debit cards.

2 No extra fees for cash transactions

When you use credit and debit cards, you will often incur an extra cost over the transaction cost. Some call it a service charge or transaction fee. However, cash transactions will always be free. You pay for exactly the service you received, nothing more nothing less. Unless of course you are a good tipper.

3 Using cash enables you to budget better

The beauty about cash is that you can only spend what you have with you at the time of doing the transaction. This means that it is much easier to stick to your budgets. The same cannot be said for credit and debit card holders who have historically been known to exceed their planned budgets.

4 Using cash improves arithmetic development

Many people never really think about it but dealing with cash actually improves your math. The fact that you have to keep on physically counting your money in order not to make mistakes while making payments will improve your arithmetic.

5 Using cash reduces debt

Many people today are struggling with credit card debts because credit cards grew shifted from being a convenience into a debt trap as a result of people spending money they do not have. However, when it comes to cash, the fact that you can only spend what you have means the probability of buying what you cannot afford reduces hence reducing your chances of falling into debt.

6 Using cash makes you more financially responsible

The good thing about cash is that before you spend it on something, you will always look back at how much time and effort you had to put in order to make it. This makes you think twice before spending your money on something that is not worthwhile. Such habits make you more financially responsible.

There you have it.

At the end of the day, the choice of whether to use cash, credit or debit card is usually down to an individual’s own preference.

It is said that prevention is the best medicine. This is true especially in economics and to be more specific debt, in that the best way to avoid falling into debt is by not letting the debts accrue in the first place.

The reason we mostly fall into debt is because we mostly need to borrow money in order to be able to finance certain necessities such as our mortgage, car payments and education among others. It is often close to impossible to pay for such necessities in cash.

We take a look at 7 easy tips on how to avoid falling into debt.

1 Try as much as possible to pay in cash: Paying in cash ensures that you spend within your budget. After all you can’t spend cash that you do not have. Therefore to avoid living beyond your means, try as much as possible to limit yourself to cash transactions.

2 Avoid impulse buying: Part of the reason most people accumulate credit card debts is because they spend money on unnecessary things mostly in the spur of the moment. It is important to nurture adherence to budgets so as to avoid impulse expenses.

3 Avoid sales traps that encourage debt: There is a tendency by most people to fall into sales traps that result into debt such as “buy now, pay later” retail offers. Such purchases end up accumulating thereby increasing your debt.

4 Do not borrow to spend: Never at any time develop a habit of borrowing money to spend on essential products. These are the kinds of products you will need regularly therefore you should use your income and not borrowed money. Borrowing to finance staple purchases is most definitely a journey into debt.

5 Go for the best offer: As we have established, sometimes you have to borrow in order to finance certain purchases. Therefore, if you must borrow, ensure that you find the lender who offers you the lowest interest rate as well as accompanying fees.

6 Monitor your credit card: Credit cards are arguably the most common source of debt currently. It is therefore important for you to closely monitor your credit card payments and keep tabs on all your purchases so that you do not spend beyond what you can afford to pay back.

7 Settle your credit card bills: There is a tendency by many people to just make the minimum payments on their credit card yet their expenditure is much higher than the minimum. This will ultimately lead to accrued bills which will lead to debt. Make it a habit to settle your entire credit card bill so that as you spend, you are doing it on a clean slate.

There you go. Do this and you will thank us later.

Most people don’t understand the effects on inflation on their finance. In fact, they will never notice the effects of inflation until it is probably too late to do anything about it. Inflation will generally lower the value of your money as the prices forconsumer products go up. This means that for an investoryour future dividend and interest payments will not be as valuable as you had anticipated.

However, there is good news. You can actually proactively protect yourself from the effects of inflation. Here are 5 tips on how to go about it.

1 You must invest in real assets

In economics, the best way to protect your money from losing its value as a result of inflation is to invest it in real assets such as property, gold, agriculture and eveninfrastructure. These are markets that usually perform well especially during times of inflation because they continue to rise even as inflation rises.

2 Ensure you get the best interest rates

During times of inflation, people lose money on their investments because they did not get a good interest rate that is high enough to protect their returns from the effects of inflation. It is therefore important for you to ensure that you have done the math to ensure the interest rate you get is sufficient to cover the eventuality of inflation.

3 Use your savings as opposed to borrowing

During times of inflation, borrowing means you will have to repay the money with a high interest rate. It is therefore advisable that if you have money available in your savings account, to use it as opposed to taking in debt to finance your expenditure. However, try not to spend all your savings or your emergency money, and be sure to refund this money into your savings account when things stabilize.

4 Be sure to protect your pension

One of the biggest victims of inflation are usually pensioners who are living on a fixed income. Their spending power will drastically go down owing to the rising prices of goods and falling value of money. It is therefore important to start building you retirement nest egg early in life, and ensuring that you maximize on any of the available savings options and offers such as employer matching options. This will ensure that by the time you get your retirement, you have more than enough set aside to cushion you from the effects of inflation.

Be sure to take these simple measures and you are on your way to financial stability.

In economics, the better your knowledge of money, the better your financial perspective will be and with that, your ability to understand how money influences the economy. This becomes important because money is the most basic tool in today’s world as it is at the center of our everyday life.

Let’s take a look at 3 important things you should know about money.

Money and wealth are not the same thing

In economics, money is essentially any acceptable medium of exchange. This basically means that anything as long as it is generally acceptable and is deemed to have value can serve as money. Keeping this in mind, having things that you can trade in exchange for goods and services does not make you wealthy, it just means you have a lot of generally acceptable mediums of exchange.

In today’s society, money is equal to credit

Today, many people spend money without even having to touch or see it. All it takes is for a financial institution to issue you with a credit card or a loan and assign a monetary value to it that you are allowed to utilize for the exchange of goods and services. This is partly the reason why literally everyone has some form of debt.

Money is a unit of account

As highlighted earlier, money is simply a medium of exchange. It is basically anything we can use in exchange forgoods and services. In modern economies, banks are the primary institutions that monitor and facilitate monetary transactions from bank payments, to credit card and debit card transactions. The fact that banks are essentially at the center of almost allmonetary transactions makes money a unit of account.

Having a better understanding of these qualities of money greatly improves our ability to utilize it.

 

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