Cash remains king as a budgeting tool
10th October 2022 10:42
by Myron Jobson from interactive investor
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Post Office reveals record cash withdrawals and deposits in August.
- The Post Office revealed its branches handled record-breaking amounts of cash in August (£3.45 billion), the first time the amount exceeded £3.4 billion in one month.
- Personal cash withdrawals in August totalled £805 million, up 0.5% on July, the previous record month (£801 million).
- Cash deposits and withdrawals in September had been expected to again reach record levels, before the bank holiday for the state funeral of Her Majesty The Queen.
Commenting, Myron Jobson, Senior Personal Finance analyst, interactive investor, says: “While digital innovation has transformed how we spend our money, cash remains king for some people as a budgeting tool amid the escalating cost-of-living crisis.
“While contactless payments are easy and frictionless, the worry for some is that they could encourage reckless spending, which could lead to debt issues at a time when many are feeling the cost-of-living squeeze on their finances. This is made worse by the fact that many have gotten into the habit of not taking a receipt – especially after using self-service checkouts – so it is harder to keep track of spending.
“There are some sections of society who are comfortable with the transition to a cashless society, but it is important to cater for the millions who use notes and coins in their daily lives - particularly elderly people and those on low incomes who are cash-dependent. But finding an ATM to withdraw cash can be tricky as bank branches have been dropping like flies amid the shift to online and mobile banking, while cashpoints are few and far between in some areas - especially for those who don’t live close to town centres.
“There is also something to be said about the value of physical cash when it comes to teaching young children about money to help them develop good financial habits from an early age. Teaching young children about the value of savings isn’t quite the same if they aren’t able to see or touch the money they’ve been given.”
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