Imagine it’s a perfect spring afternoon at the ballpark, and you’re ready for a hot dog and a soda before the game. Since your dad wants something from a different food stand, you split into different food lines.

When it’s your turn to order, you pull out your phone and pay for it effortlessly with your digital wallet — tap, done, easy. But then a thought crosses your mind… what would you have done if your phone died? You don’t carry any cash with you, and you left your other physical payment options in your wallet back at home.

Meanwhile, in his food line, your dad is paying with cash. To his surprise, the vendor gives him a small discount — nice perk! But what if he had needed exact change to make his purchase, or if the entire ballpark was cashless and he’d been required to pay electronically, as is often the case these days?

Different ways to pay, different experiences.

Invisible Digital Finances

In today’s society, cashless transactions are becoming the norm, with many countries moving in this direction. Digital purchases offer several advantages, including easier international payments, faster transactions, and a reduced risk of theft of physical wealth. However, you still need to stay on top of your spending and understand the funds you have available (incoming and outgoing) at any given moment. Easy transactions can make it equally easy to overspend. In fact, your digital purchases may even require more observation simply because of the speed at which they can move.

Cash in Hand

You either have it, or you don’t. When you use cash, you not only logically but tangibly know how much you have available and can, therefore, discern whether or not the expense you’re considering is one you can truly afford and want to make. When you do decide to spend your money, it’s an anonymous transaction — there’s no digital trail or tracking of the payment. Moreover, unlike credit cards, cash transactions don’t involve borrowing money or accumulating interest on debt — you pay with what you have.

Using a System You Know

Just as younger generations may feel at ease when they tap or scan apps for store purchases, online banking, mobile payments, or credit cards, older generations may prefer the solid, straightforward use of paper money they can see and feel and track manually. Paying with paper money and coins can serve well as a budgeting tool, making it easier to manage spending, avoid debt, and deter potential credit and debit card fees and overdraft risks.

On the other hand, going cashless comes with instant perks — digital payments provide a clear record of your expenses in your accounts and apps, making it easier for you to track your spending, if you pay attention to them. Businesses can also benefit from lower overhead costs depending on how their patrons and employees handle cash.

Keeping Up with Payment Options

Transitioning to a cashless system can be challenging for those who don’t want or need to purchase and maintain a device (e.g., smartphone, tablet) that they might use to make their purchases or manage their accounts online, but resources are available to help. For example, iPhone users can take free classes at Apple stores to learn about mobile payments and digital wallets. Android and other smartphone users can visit their carrier’s store for guidance on using mobile payment technology.

The bottom line? Both cash and cashless transactions have their advantages. Cashless payments offer convenience, speed, and security, making transactions more efficient and easier to track. Cash can be very convenient, too because it doesn’t require any additional devices, and it can feel more private because there is no digital paper trail. Either system can help you maintain your budget, as long as you know where and how to manage your money. A balanced approach, such as enabling mobile payments on devices while continuing to carry a modest sum of cash in your wallet, might provide the best of both worlds.

Protecting Your Finances

No matter how you spend your money, it’s important to manage it well to ensure you and your family have what you need to enjoy the years to come. The best way to protect your financial assets is with right-sized life insurance coverage that will be there to ensure your survivors can maintain their financial security when they experience a loss. Consider your policy options today. Get a quote.