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Are We Really Headed for a Cashless Society?

Everywhere you turn right now, it seems like someone wants to chat you up about our world turning into a cashless society. Your neighbor’s talking about it, the frenzied news media is talking about it, your social media feed is talking about it . . . and there’s even a viral article on the internet about a cashless society that’s claiming Dave Ramsey wrote it (spoiler alert: he didn’t).

So, why all the hype about a cashless society all of sudden? And how does it look any different than the digital world we live in now? Let’s break down everything you need to know (and debunk some junk too).

What Is a Cashless Society?

Here’s the deal: In a cashless society, all physical money (cash, checks, coins) is completely, 100% replaced by digital money.

You might be thinking, Wait . . . don’t we already have a cashless society now? And you wouldn’t really be wrong. Unless you’re a hardcore stickler for the envelope system, when was the last time you used cash daily to pay for everything?

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Pew Research shows that in a typical week, 29% of Americans make absolutely zero purchases using cash.1 A lot of us swipe our debit cards to pay for everything and have wallets stuffed to the brim with receipts, rewards cards and gum wrappers—anything but cash.

But a true cashless society is way different than that. It’s a world where cash doesn’t exist, no one is paid “under the table,” and every transaction you make is traceable (insert Twilight Zone theme song here).

Why Are People Talking About a Cashless Society Now?

Well, see . . . there’s this thing called COVID. Ever heard of it? Yeah. When it came on the scene, it impacted nearly every single aspect of life as we knew it—including our money.

People started not wanting to touch anything that someone else touched (without it being sanitized first). And what’s one of the grimiest, germ-infested things that passes easily from person to person? Hint: It’s got presidents’ faces on it. That’s right. Money. But not the digital kind—we’re talking cold, hard cash and coins.

It didn’t take long for businesses to decide they didn’t want cashiers handling cash from every random customer coming in off the street. So they started pushing that people pay for things with cards only. Signs like “not accepting cash” and “cards only” started popping up at stores across the country—because somehow that’s safer.

We hate to break it to you, but you still have to touch someone’s card (unless the card reader is on the customer’s side). Even then, the poor customer still has to touch the buttons on the PIN pad that someone else just touched before them. It never ends! By the way, money was always gross, even before COVID ever came along. But that didn’t seem to bother anyone then. Strange . . .

Does This Have Something to Do With the Coin Shortage?

You’ve probably heard all about the great American coin shortage going on right now. If you lump the phrases “cashless society” and “coin shortage” together, then yeah, you might find a conspiracy theory ready to jump out at you. But here’s the deal: When people stop using cash to buy things, a coin shortage isn’t super surprising.

Think about it. There’s a coin shortage right now because back when businesses were closed, there weren’t any coins changing hands. And even when people did make purchases, they weren’t using cash and coins to do it!

Plus, the U.S. Mint (they’re responsible for actually making the coins) had less staff on hand during the pandemic. And when businesses opened back up, the need for coins was greater than the amount of coins existing out there in the world. In other words, the real problem comes from coins not moving around out there in the wild of the economy and not from a true shortage of the coins themselves.2

Add all that up and it equals one big shortage of coins. That’s all, folks. So take a big breath, stop looking for the boogeyman around every corner, and just be prepared to have exact change with you if you’re paying in cash.

Will the COVID-19 Pandemic Lead to a Cashless Society?

Nope. We still have a long way to go for that to happen. Just because some stores don’t want to accept dollar bills right now doesn’t mean that a cashless society is our next surprise of 2020. 

Think about how much of your money is virtual already. Does your boss hand you a wad of cash on payday? We’re guessing not. You probably wake up on Friday morning to a nice little direct deposit from your employer in your bank account. You never saw the money physically. It never changed hands in person. And the only reason you even know you did get paid is because some ones and zeroes tell you that you did.

Having said that, this doesn’t mean we live in a cashless society. You can still pull out cash from the bank and stuff your grocery envelopes with it or slip it under your kid’s pillow for their lost tooth. Cash is still alive and well, and no pandemic can take it down. Like it or not, there are plenty of people who like and rely on using cash bills. And as long as those people are around, no, we won’t be moving to a cashless society anytime soon.

Cash Is Still King

Yeah, you read that right. Dave has always stood by using cash, and that will never change. When you buy something with cash, you really feel it. You have to give up something (like that $20 bill) to get the thing you want to buy (like that spanking new T-shirt). There’s internal friction there as you watch the money leave your hands and go into the cashier’s drawer.

Think about how much big businesses would love for us all to go cashless, though. People who buy things with cards (yep, even their debit cards) tend to spend more. And people who use things like mobile wallets just swipe away like they’re playing around with virtual Monopoly money. So, of course these big companies would jump at the chance to get us all to stop using cash for good! It’s more kickback in their pocket—a lot more if you use a credit card.

If you don’t feel comfortable using cash these days because of COVID, that’s okay. Just use your debit card (like you probably were already doing). And don’t feel like you’re contributing to the “downfall of America” by not using cash. Seriously. As long as you have money in the bank, using your debit card is okay.

At the end of the day, whatever kind of payment you want to use (debit, mobile wallet, cash), just make sure you’ve budgeted for it first. You need to plan for every expense whether you’re laying down a few George Washingtons at the gas station or paying back your friend for covering lunch.

Our free budgeting tool, EveryDollar, makes it easy to plan and keep track of all the money you have coming in and going out. And if you want to dive into some fancy features like connecting it to your bank account to track purchases (so easy!) and getting insights on your spending habits, then try out a free trial of Ramsey+. These tools will help you feel empowered and take care of all the guesswork for you. Staying on top of the money in your own life is the best way to stick it to this cashless society business.

Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners.