{"id":1179,"date":"2023-04-03T16:52:02","date_gmt":"2023-04-03T20:52:02","guid":{"rendered":"https:\/\/blogs.bu.edu\/zagorsky\/?page_id=1179"},"modified":"2025-05-19T09:44:45","modified_gmt":"2025-05-19T13:44:45","slug":"book-power-of-cash","status":"publish","type":"page","link":"https:\/\/blogs.bu.edu\/zagorsky\/","title":{"rendered":"News Release “The Power of Cash”"},"content":{"rendered":"

Why you should use cash for purchases at least once a week<\/strong><\/p>\n

In a new book, an economist explains the vital role of paper money<\/em><\/strong><\/p>\n

Boston, Massachusetts \u2013 It is so easy to pay for your everyday purchases with a credit or debit card or an app on your phone \u2013 why would you ever want to use cash?<\/p>\n

Hold on just a minute.\"\"<\/p>\n

In a new book<\/a>, an economist explains the benefits to you and society when you pull out some bills rather than a phone app or credit card.<\/p>\n

Using cash helps you spend less money in a shopping trip, reduces the price you pay for goods and services, gives you privacy, helps the poor, reduces problems caused by natural disasters and protects a country from external enemies, said Jay Zagorsky, author of the book The Power of Cash: Why Using Paper Money is Good for You and Society<\/em>.<\/p>\n

That doesn\u2019t mean you have to ditch your apps and cards, said Zagorsky, clinical associate professor of markets, public policy and law at Boston University\u2019s Questrom School of Business.<\/p>\n

\u201cI\u2019m not trying to be crazy.\u00a0 I\u2019m not saying give up your mobile payments and cards. Just use cash at least once a week. Keep it in circulation,\u201d Zagorsky said.<\/p>\n

\u201cMake sure that stores you buy from continue to accept cash and clerks know how to use it so we can get all these benefits for ourselves and society.\u201d<\/p>\n

In The Power of Cash<\/em>, Zagorsky lays out all the reasons why we wouldn\u2019t want to live in a cashless society.\u00a0 For one, imagine a natural disaster like a hurricane, earthquake or flood that knocks out power for days or even weeks.<\/p>\n

The stores you go to don\u2019t have power \u2013 so they can\u2019t process electronic payments.<\/p>\n

And it is not just natural disasters. If a foreign enemy was able to destroy the ability to move electronic money around by taking out our electrical grid or internet, the economy in a cashless society would grind to a halt.<\/p>\n

\u201cA natural disaster or attack by a foreign enemy could make it impossible to buy food, pay for medical care, or use transportation,\u201d he said.\u00a0 \u201cThe thing about cash is that it always works. We need that ability.\u201d<\/p>\n

But even without disasters or foreign attacks, cash helps us.\u00a0 For one, studies show that people spend less money at a store when using cash versus when they use credit. With cash, consumers have a hard constraint on what they can spend at one time. But with a credit card, they can spend as much as their credit limit allows.<\/p>\n

Also, studies show that using cash has another powerful way of reducing spending: triggering regret. Using cash makes a purchase more tangible, more real for people, Zagorsky said. This \u201cpain of paying\u201d can help people spend less, particularly on items they really don\u2019t need.<\/p>\n

\u201cWhen you use a credit card, you often don\u2019t pay much attention to how much you\u2019re spending. You just tap your card and don\u2019t look at the total cost,\u201d he said. \u201cIt encourages you to spend money you don\u2019t have.\u201d<\/p>\n

And because merchants have to pay fees to credit card companies, it increases overall prices.\u00a0 These costs are borne mostly by the poor and those who keep balances on their credit cards, paying interest each month on their balances.<\/p>\n

That\u2019s not the only way a cashless society hurts the poor, Zagorsky said.<\/p>\n

\u201cA cashless society marginalizes the poor and those who are unbanked.\u00a0 Not everyone in society has or can get an account at a bank or financial institution,\u201d he said.\u00a0 Cash also enables aid to those asking for \u201cspare change\u201d or for small donations to charitable organizations.<\/p>\n

Another advantage of cash? Privacy, Zagorsky said. Credit cards create a large amount of data with every transaction.\u00a0 \u201cNot everyone wants others to know that they are using weight-loss products, coloring their hair or buying lottery tickets,\u201d he said.<\/p>\n

Zagorsky said he hears people say they understand the need for cash in emergency situations like natural disasters, so they keep a stash on hand, just in case.\u00a0 But that\u2019s not enough, he said.<\/p>\n

\u201cCash is not going to help if most stores don\u2019t accept it, or cashiers don\u2019t know how to handle it,\u201d he said.<\/p>\n

Zagorsky has had several personal experiences with cashiers having trouble handling cash.\u00a0 Recently, he paid cash for some items at a supermarket and was supposed to receive 40 cents in change. But instead of giving him four dimes, the cashier gave him four nickels.<\/p>\n

\u201cThis wasn\u2019t the only experience like that I have had. I think employees just have less practice handling cash, and that\u2019s not good,\u201d he said.\u00a0 \u201cWe need more people using cash so that clerks and waiters and bartenders are used to it.\u201d<\/p>\n

Zagorsky also urges parents to teach their children how to use cash and make change. That helps kids learn arithmetic skills like addition, subtraction and multiplication and will be good for them in the long run.<\/p>\n

\u201cGiving kids experience with cash is a way to ensure that it stays around, so we get those benefits of privacy, and lower prices and national defense,\u201d he said.<\/p>\n

So what should people do to ensure that cash survives in our society?<\/p>\n

Zagorsky recommends that people get into the habit of using cash for small and medium purchases. Restaurant meals and takeout food are excellent places to use paper money, since those aren\u2019t the types of purchases you might want to return later.<\/p>\n

Second, make sure that you always carry some paper money with you, since it is impossible to spend cash if you don\u2019t have it.<\/p>\n

Also, keep some emergency cash at home, to deal with natural disasters, power failures or other calamities that will make it impossible to use electronic payments.\u00a0 ATMs won\u2019t work if the power is out, so you will need to already have some cash<\/p>\n

When your friends and family see you using cash, tell them why, Zagorsky said. The key is to make sure that as many people as possible are using paper money, at least some of the time.<\/p>\n

\u201cMaking small changes so that you use cash more often has a profound impact when millions of others also make these small changes,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"

Why you should use cash for purchases at least once a week In a new book, an economist explains the vital role of paper money Boston, Massachusetts \u2013 It is so easy to pay for your everyday purchases with a credit or debit card or an app on your phone \u2013 why would you ever … Continue reading News Release “The Power of Cash”<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":5335,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":[],"_links":{"self":[{"href":"https:\/\/blogs.bu.edu\/zagorsky\/wp-json\/wp\/v2\/pages\/1179"}],"collection":[{"href":"https:\/\/blogs.bu.edu\/zagorsky\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/blogs.bu.edu\/zagorsky\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.bu.edu\/zagorsky\/wp-json\/wp\/v2\/users\/5335"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.bu.edu\/zagorsky\/wp-json\/wp\/v2\/comments?post=1179"}],"version-history":[{"count":4,"href":"https:\/\/blogs.bu.edu\/zagorsky\/wp-json\/wp\/v2\/pages\/1179\/revisions"}],"predecessor-version":[{"id":1220,"href":"https:\/\/blogs.bu.edu\/zagorsky\/wp-json\/wp\/v2\/pages\/1179\/revisions\/1220"}],"wp:attachment":[{"href":"https:\/\/blogs.bu.edu\/zagorsky\/wp-json\/wp\/v2\/media?parent=1179"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}