Money – Is Carrying Cash Still Important to You?

I use the terms “cash” and “money” here interchangeably to refer to bills and coins. There are so many new ways of paying; is it possible that money will become a thing of the past, or has it already? Any cash in your pocket?

The History of Money

The concept of money has been around for centuries. But how did trade or commerce occur before the invention of bills and coins? Well, that goes back to a long, long time ago.

Barter was a primary method of commerce. People would trade what they had for what they needed. The participants agreed on value for value, so there was no need for money at that time in history. There was general satisfaction with the system. But what happens if you don’t have anything to trade for what you need or the other person doesn’t want what you have?

The Lydians, the people of present-day Turkey, were the first to use gold and silver coins around 650 to 600 BC. The Chinese used paper money during the Song Dynasty. Paper money finally arrived in Europe in the 13th century and was used together with coins. I only present a brief history here. If you are especially interested in the history of money, check out the resources below.

Banks and Bank Accounts – Where’s My Money

When I was a kid growing up in the 50s, my Dad was a painter/wallpaper hanger. In those days, it was a decent job. At that time, employers paid their workers in cash. Bank accounts were yet to be commonly available in those days. My Dad would give money to my Mom for housekeeping and keep whatever he could to go drinking with the boys.

I got my first bank account in the early 60s. As I remember, that account was for savings only. I put any money I made from babysitting, mowing lawns, or digging gardens into that account, except for whatever I needed for the occasional movie. The account was for deposits and withdrawals but nothing else. I got about 6% interest per annum on a simple savings account. You can’t find that anywhere now.

Paycheque Deposits and Outgoing Cheques

Later, when I got my first full-time job, I received a paycheque every two weeks. Then, I also had a chequing account at the bank. I still paid for most things in cash. However, I paid any significant expenses, such as rent, by cheque. I had to ensure I left enough money in the chequing account to cover any outstanding cheques. Banks weren’t, and still aren’t, understanding if you wrote a cheque on your chequing account, but your money was in your savings account.

Things became more complicated with juggling money. I had a savings account and a chequing account, but I was still primarily paying by cash. I had to be careful that the money was in the right place at the right time. For a young guy just starting out, I learned my lessons quickly.

Credit Cards for Money You Don’t Have Yet

General credit cards first came to Canada in the mid-70s. The first two I remember were Visa and Master Plan, which became Mastercard. Previously, you could only get a credit account with major department stores. They were usually just used for big-ticket items such as furniture. But with these two new cards, you could use them almost anywhere to buy almost anything. It’s funny how easily and quickly many small purchases add up to more than one big purchase. Credit cards were just too convenient.

An interesting aside. I moved to Japan for a few years. As I’m sure you know, credit card statements come out once a month. When I even received my credit card statement in Japan by mail, the payment was already past due, so I was always late with my payments. The post office couldn’t keep up with the requirements of the big banks.

Responsible Use of Credit Cards

For most people, credit cards are more trouble than they are worth. Suddenly, it’s not about how much money you have but how much credit you can access. And the credit card people are a kind bunch. The more you charge, the more they will let you charge as long as you make the low minimum monthly payment.

And the more you spend, even though you don’t pay immediately, the more the economy is stimulated. However, it’s not beneficial to your personal financial situation. You may be in debt up to your eyeballs, but the economy in general is booming. That’s capitalism at its best.

If I had financial advice for my children, I would tell them:

1. Get a credit card with a $1,000 limit for emergencies only.
2. Never buy something for which you don’t have the money already in the bank.
3. Pay the entire credit card balance every month.

If you follow this advice, you will sleep much better at night. That leads us right into debit cards.

Debit Cards Replacing Cash

Unlike credit cards, debit cards were a good step forward in financial planning. They arrived in Canada in the early 80s. Debit cards are the most significant contributor to the decrease in cash purchases and payments, and there are reasons for that. Having a debit card is much more secure than carrying cash. If someone robs you, your money is long gone. Losing your debit card is inconvenient because you must cancel it and get a replacement, but you won’t be out of pocket.

The only real problem with debit cards is convincing older adults that they are safer and more secure than cash. As Air Supply sang in their hit song from 1980, “Old Habits Die Hard.” I wonder if the title came to the writer while he was trying to convince his grandparents of the convenience of a debit card.

Debit Cards 2.0 and Higher

Even though I think debit cards are convenient, with each “improvement”, I get a little more nervous. You had to sign the debit receipt for any transaction when they first came out. That seemed reasonable because not just anyone could forge your signature. Next, you just had to input a four-digit PIN, and as long as you didn’t give your PIN to anyone else, you were good. I’m still comfortable with that. However, now all you have to do is tap your card on the debit machine. If that’s all it takes, it’s an ultimate convenience, but the security is gone.

For example, I get a tank of gas, which requires a second mortgage on my house at today’s prices because gas is so expensive. What if I unknowingly drop my debit card? In that case, I potentially have a big problem. Some joker could pick up my card, fill his tank, and tap my card to pay for it. When is this madness going to stop?! Punching in a four-digit code is not particularly inconvenient. Please stop making me use that stinking tap function. Deactivate it now!

Canadian Money

The Canadian dollar (CAD, C$, or $ locally) is Canada’s legal currency. You can also use the symbol “¢” (cents) for values under one dollar. At this time, the Royal Canadian Mint produces the following coins, and the Canadian Bank Note Company prints the following notes or bills:

Why Currencies Change

Most countries change their currency as needed, some changes minor and some significant. There are five main reasons for the need to change currencies:

1. All of the changes in technology above have made bills and coins less relevant in today’s society.
2. Inflation has made some coins almost valueless.
3. The metal content of some coins may be worth more than the face value of the currency.
4. Technology has also provided new methods of counterfeiting.
5. Simple convenience.

Canadian Currency Changes

• Loonie – This coin first appeared in 1987 to replace the $1.00 note.
• $1.00 note – stopped being issued in 1989
• Toonie – This coin first appeared in 1996 to replace the $2.00 note.
• $2.00 note – stopped being issued in 1996
• $1,000 note – stopped being issued in 2000; it was too easy to counterfeit
• polymer notes – Between November 2011 and November 2013, all newly printed banknotes were converted to polymer.
• Penny (1¢ or $0.01) – In February 2013, the Royal Canadian Mint stopped producing the penny; inflation made the penny worth less than the cost of producing it.

So What About Cash

Paying for everyday items with a debit card and paying monthly bills online is the best combination. I rarely touch real money, meaning cash, and I seldom have money in my wallet. There’s virtually nowhere that I can’t use my debit card or, very occasionally, my credit card for online purchases.

I would happily have a digital trail for all my financial transactions; no money would ever need to change hands. If many other people feel the same, money will be a thing of the past much sooner than we think.

And Now For Your Listening Enjoyment

Here is Money, Money, Money by ABBA from late 1976. If you put on your glasses, you can see the lyrics in tiny letters at the bottom of the screen.

The above essay is for entertainment and English language study only. For suggestions on how to use this post to improve your English reading and listening comprehension, click here.

Vocabulary

• commerce – noun; financial transactions, esp. the buying and selling of merchandise, on a large scale; buying and selling mostly by companies
• barter – transitive verb; exchange (goods or services) without using money; trading without money
• per annum – adverb; for each year; each year
• paycheque – noun; an esp. rectangular payment given to an employee; paper payment to an employee that can be converted to money
• cheque – noun; written order to a bank to pay the stated sum; a written document to someone from another person’s bank account
• juggling – transitive verb; continue to deal with (several activities) at once; more complicated (in this context)
• credit card – noun; a card issued by a bank or business authorizing the obtaining of goods on credit; a card to buy now, pay later
• big-ticket – attributive adjective; expensive; expensive
• capitalism – noun; an economic system; private enterprise and investments
• debit card – noun; a card enabling the holder to pay for purchases electronically by transferring funds from a bank account; card to pay directly from your bank account
• out of pocket – adjective; (of costs or expenses) paid out in cash; paid for by you; at your expense
• PIN – noun; (also PIN number) a confidential identification number issued by a bank, etc.; a personal number used to access a bank account
• tap – transitive verb; to strike lightly; to only touch or make contact
• ultimate – adjective; maximum; the best
• unknowingly – adverb; not knowing; didn’t know
• potentially – adverb; the possibility of something developing or happening; might happen
• joker – slang noun; somebody; an unknown person (in this context)
• stinking – slang adjective; very objectionable or despicable; strongly disliked (in this context)
• deactivate – transitive verb; make inactive or less reactive; make inactive or disconnect
• polymer – noun; a material more like plastic than paper; used for banknotes (in this context)
• digital trail – noun; online or computer record

Comprehension Questions

1. Do you have a bank account?
   Yes or No
2. Do you have a job?
   Yes or No
3. Do you get paid by cheque or cash?
4. Do you usually pay cash on a day-to-day basis?
   Yes or No
5. Have you ever used a credit card?
   Yes or No
6. Have you ever used a debit card?
   Yes or No
7. How many different Canadian coins are there?
   (a) two, (b) four, (c) six, or (d) eight
8. How many different Canadian banknotes or bills are there?
   (a) three, (b) five, (c) seven, or (d) nine

Answers

Resources

• Wikipedia – Money
• Wikipedia – Coins of the Canadian Dollar
• Wikipedia – Banknotes of the Canadian Dollar