Money Issue

As money goes more digital, a debate is arising as to the benefits of cash or the greenback.  This morning on the CBS Sunday Morning show, such a report reviewed the drawbacks of the greenback and how going digital is wonderful.  Here is the link The Money Issue.  Yes, handling the greenback is hazardous to your health as it is with other countries currencies. 

What the report neglected to address is a couple of the following: 

1) high finance charges for the card swipes...for example, Paypal charges a certain percentage.  When you pay $8, then the person receiving payment has to pay taxes and employment insurance costs AND now another fee called the finance charge.  It squeezes small business net profits in an economy that is struggling as it is.

2) there is less accountability for impulse spending.  When you spend cold, hard cash, it's harder to release it rather than the digital component.  McDonald's conducted a study whereby it was affirmed that people bought more fast food products when using a credit/debit card rather than cash.

3) there are many workers who benefit from cash payments such as babysitters, servers, valet parkers etc...  There may be a drawback to criminal activity using cash transactions but when the power goes out and many people do not pay for a smartphone, why punish good hardworking people by doing away with cash?  It's not a negative to pay for things in cash.  It's cool.

4) Educators in schools use the greenback and coins (play money) in the classroom to teach children about money.  To do away with the adult population using currency because it is likely to go digital is a challenge to teach future generations about the value of money and how to properly manage their finances.  The reintroduction of personal finance in schools is necessary to train up this generation so that we as a nation don't deal with debt or overspending issues as our present generation is doing.

Not mentioned is the increase in bartering between two parties where there is an exchange of goods and services for goods and services, not cash or payment with money. 

For the New York reporter who filed this news report, he should have reviewed these aspects in his report rather than allow technology to sweep him off his feet.  He should go to rural America outside the NorthEastern part of this country for a true understanding of average Americans. He should also travel to various parts of the world with other military personnel see how American military families deal with international spending issues.  I believe that he will revise some things in his report if he conducts further research.  No offense sir but I believe that you did a decent job raising awareness and missed a few key points. 

Staying with cash and the greenback will benefit this country, not the government.  There are other ways for government to reduce spending and one way is to NOT adjust and do away with the greenback or coins. 

This financial perspective is to elevate more understanding about the classic issue of bartering or exchange of goods and services as well as to bring light to the money issue present day. 

by Stephanie Arredondo (c) 2012

(I wrote this article quickly with children playing the background, phone ringing and other household activity that can easily distract the writer because that's how important this financial perspective is)