Day 15: Saving Money During Quarantine

Cash. Original photo by Alexander Schimmeck on Unsplash

I am definitely spending less money during this quarantine period than I would on an average week, and it’s not because people are afraid they’ll get coronavirus from cash.  It’s because I’m not leaving the house.  We’ve only purchased groceries once, filled the gas tank once, and bought takeout pizza once.  As COVID-19 increases, our spending opportunities decrease.

But generally speaking, I prefer cash over cards, and anyone with the prepper mindset should be aware of when and why to buy items with cash rather than via an electronic payment method.  Because anything electronic has a good chance of becoming part of what is known as “Big Data,” that giant database a number of companies are compiling on you, often without your awareness or permission.

Cash Provides Anonymity

If you buy alcohol, cigarettes or any other vices, you might want to consider using cash because chances are good your insurance provider either is or will one day be monitoring your health by monitoring your credit card and bank card charges and will adjust your rates accordingly.

Another area to consider is over-the-counter medicines.  Think about it: do you really want your credit card company to know you have a rash/a yeast infection/incontinence/herpes or some other potentially embarrassing condition?

Likewise, I may not want Visa, American Express or my bank to know that I shop at Bob’s Gun Store.  So I pay cash and minimize their ability to track my purchases. The same goes for buying prepping supplies.  I don’t want the government showing up to confiscate my storage food because records show I bought a year’s supply of food.  And cash keeps you anonymous to the retailer as well.  They can’t tell anyone that Joe Smith from Your Town has bought thousands of dollars of supplies and is ripe for the plucking when the balloon goes up.

Now you may say that the credit card company doesn’t know what you buy, only where you spent your money and how much, and that is usually true.  But the store where you made your purchase knows what you bought, and they will use the electronic data on your card plus details from your loyalty card to put together a profile on you.  I know Walmart does this because I’ve talked to people who helped them build their system.  If you shop at CVS, you get to see the evidence at checkout because they always print out coupons for things you’ve purchased before.  So if you want to use a membership or affinity card to save money, get a new one every few months, don’t go online to register it, don’t give them your phone number, and always pay with cash.

Cash Controls your Spending

Spending cash is also good because it makes it difficult to spend more money than you have.  If you see something you wanted but didn’t really need is suddenly on sale, you may buy it when you can put it on your card and go into debt.  But if you have to pay cash, then you have to have the cash right there, right then. And if you spend your cash frivolously, you may be running out of food by of the month and eating rice and beans.  When you pay cash, that sale may not seem like such a good idea.  So using cash helps with budgeting and avoiding debt.

Cash is also leverage.  In many places, you will find that a bill in the hand commands respect, service, speed, rule bending and forgiveness. Thanks to greed, a big enough bill will often get you special treatment.  Sometimes, you can negotiate discounts when you pay cash. Maybe the guy who sells you firewood will cut you a break if you pay with folding money.

Tax avoidance is another reason to like cash.  Maybe that small business owner you give cash to will report the cash you give them, maybe not, but that’s their decision and none of your business. When you pay by credit card, you force them to record the sale because the card company sends them a 1099 every year.  I’m talking about your barber, hairdresser, dry cleaner, or anyone who is an independent contractor or self-employed.

For that reason, I also like to pay cash or at least tip in cash for personal services.  If you leave a cash tip for the person who cuts your hair, waits your table, or grooms your dog, then it is up to them to decide whether they want to report that income on their taxes. When you pay by card, their employer knows how much they make in tips and so does the IRS.

When to Use Credit Cards

When do I use credit cards?  At the gas station, because it’s convenient and I don’t really care that someone knows how much gas I consume; online, for obvious reasons; when I need to track tax deductible expenses; for things that I expect to be reimbursed for and therefore need a good receipt; when I’m buying something that I want the extended warranty provided by the card; when I don’t trust the vendor and am afraid that if I pay cash, I may never get the service; and when I have a large unplanned expenditure, like a sudden car repair.

Although I obviously like cash and the options it gives you, I think it is a good idea to pay via card from time to time.  For example, if you rarely use credit or debit cards, any government agency that investigates you will see that you live a cash lifestyle and they will immediately suspect you of having an illicit source of cash and it will move their needle towards suspecting you of being a criminal with an illegal source of cash.  But if someone accesses your credit card or bank records and sees an occasionally restaurant, a bunch of gas stations, the grocery store, the hardware store, the copay at the doctor’s office, and a few other “normal” transactions, then you have allayed their suspicions by looking normal while also not giving them any transactions that appear to be suspicious. 

Finally, as every prepper knows, cash may quickly become the primary method of payment during a power outage or grid down situation.  So keep some cash on hand so you can make emergency purchases when the power is out.