Financial Planning Tips: The Pros and Cons of the Cash-Only Spending Method (Part 2 of 2)

Interested in Cash-Only Spending in Your Financial Planning Strategy? Learn About Potential Pitfalls.

Financial PlanningThere is a proliferation of consumer choice in items to purchase (case in point: I just searched for “iPhone 7 case” on and the search returned 25,600 items for sale). This massive amount of purchase choices can be overwhelming in and of itself. Now, combine all the purchase choice options with the increasing number of payment methods option to purchase such items and you may just about explode with anxiety and decision-making paralysis. There are so many different payment methods to choose from these days: cash, credit card, debit card, personal check, PayPal, Venmo, Apple Pay, Google Wallet, store credit cards, gift cards, pre-paid cards, store value cards, direct debit or direct bank withdrawal, bitcoins, money orders, and so on. Spending and saving your money wisely is one of the main hallmarks of prudent and successful financial planning. However, making good monetary decisions is not only about what you choose to buy but also about the method of payment you choose to make these various purchases. Among the crazy sea of payment options, it is possible to find a personal finance beacon of light and choose your method of payment in a strategic manner that can help you stay on track with your financial planning goals.

In previously published blogs on the Summit Brokerage Blog, we’ve discussed these related financial planning topics:

  • When credit cards, as opposed to debit cards, may be your best payment method option (click here to read the blog);
  • When debit cards, as opposed to credit cards, may be your best payment method option (click here to read the blog); and
  • Some of the pros of using a cash-only spending method over other payment methods options (click here to read the blog).

In this instant blog, we will outline some of the cons of using a cash-only spending method.


Potential Cons to Paying with Cash:

  • Increased risk of loss or theft: If you lose cash or your cash gets stolen, you can file a police report or alert a store manager, but it’s highly unlikely you’ll get your money back. On the other hand, if you lose your debit or credit card, you can immediately report it as lost or stolen to your bank or credit card company and they can cancel or freeze the card. Depending on your credit card company, you are usually not liable for any unauthorized charges made on your card. Be sure to check with your debit and credit card company, as they have varying policies on this issue.
  • Frequent ATM trips can be cumbersome and expensive: Going to the ATM for frequent cash withdrawals is annoying, time-consuming, and can put you at increased risk for crime. Also, if you are not using the ATM machine associated with your bank, you can quickly incur ATM fees. Moreover, many debit cards have daily limits on how much money you can withdrawal from an ATM machine. What if your daily limit is $250 and you need $300 to get your blown-out tire fixed? Also, if you plan on keeping larger amounts of cash at your home or business so that you always have cash on hand and don’t need to constantly go to the ATM or the bank to make cash withdrawals, you’re going to need to install a high quality safe at your home or business. This safe is not only expensive to purchase and install but also may put you at increased risk for theft from your employees or people who may enter your home and see that you have a safe.
  • It’s easier to track your spending with credit/debit cards: If you’re one of the increasing number of consumers who like to track their spending via mobile banking and budgeting apps that automatically input and categorize your debit and credit card purchases, you won’t be able to access this useful budgeting technology when you spend with cash. Unless, that is, you want to track all your cash purchases by hand, which would be incredibly burdensome. However, if you are paying cash for something that may be tax-deductible (i.e., you make a cash donation to a 501(c)(3) charity or are buying office supplies for your home business), we recommend that you save your receipt in your designated tax information storage system and also take a picture of the receipt with your smartphone and then send it to a designated, password-protected folder on your computer.
  • Some purchases require a debit or credit card: You may have heard the saying “cash is king”, but not everyone takes cash these days. Some merchants like rental car companies and hotels require a credit or debit card to reserve a car or hotel room. Also, you need a debit card, credit card, or PayPal account to use popular apps like Uber and Lyft.

Whether you’re looking for financial planners in Boca Raton or from one of our other 450 branch offices throughout the country (click here to locate an office close to you), we encourage you to experience the Summit difference and learn more about our network of independent financial advisors. To learn more and find a local Summit financial advisor you feel comfortable with on both a personal and professional level, visit


Summit Brokerage Services has been voted the #1 boutique independent broker dealer in the country. To experience the Summit difference and learn more about our independent financial advisor network, visit or call us at (800) 354-5528.



About Summit Brokerage Services, Inc.

Summit Brokerage Services is part of Cetera Financial Group. Summit Brokerage provides a broad range of securities brokerage and investment services to primarily individual investors. Summit Brokerage also sells insurance products, predominantly fixed and variable annuities and life insurance through its subsidiary, SBS Insurance Agency of Florida. Summit Brokerage also provides asset management services through its investment advisor, Summit Financial Group, Inc.


About Cetera Financial Group

Cetera Financial Group® (“Cetera”) is a leading network of independent retail broker-dealers empowering the delivery of objective financial planning advice to individuals, families and company retirement plans across the country through trusted financial advisors and financial institutions.  Cetera is the second-largest independent financial advisor network in the nation by number of advisors, as well as a leading provider of retail services to the investment programs of banks and credit unions.

Through its multiple distinct firms, Cetera offers independent and institutions-based advisors the benefits of a large, established broker-dealer and registered investment adviser, while serving advisors and institutions in a way that is customized to their needs and aspirations.  Independent financial advisor support resources offered through Cetera include award-winning wealth management and financial planning and advisory platforms, comprehensive broker-dealer and registered investment adviser services, practice management support and innovative technology.  For more information, visit


*”Cetera Financial Group” refers to the network of retail independent broker-dealers encompassing, among others, Cetera Advisors, Cetera Advisor Networks, Cetera Financial Institutions, Cetera Financial Specialists, First Allied Securities, Girard Securities, and Summit Brokerage Services.


All information herein has been prepared solely for informational purposes, and it is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading strategy.


Content created by Summit Brokerage Services, Inc.

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