Colorado legally requires businesses to accept cash — but report shows it’s not enforced in the state. Why simply using your card could hurt your wallet
When Tom Dyke went to Denver’s Summit Music Hall, he saw signs all over the concert hall telling him that it is a cashless establishment.
When he asked a bartender if he could pay for a drink in cash, he was given a firm “no.”
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But Dyke knew that Colorado had put through legislation in 2021 that a business must accept cash, in response to many establishments becoming cashless during the COVID-19 pandemic.
However, a 9NEWS investigation found that no businesses have been fined the $250 for breaking this law since it was enacted.
“Why bother putting it on the books if you’re not going to enforce it?” Dyke told 9NEWS.
In 2022, the Pew Research Center discovered that over 40% of American consumers typically don’t ever pay with cash, an increase of more than 10% since 2018. Here’s more on when cash can be superior — and when it isn’t.
Cards may lead to more spending
While the legislator who put forward the bill has said his goal was removing a barrier for Coloradans who don’t have bank accounts (also known as being unbanked), many other residents of the Centennial State could stand to benefit from it. Though debit and credit cards are an easier way to pay, their seamless nature can easily lead to overspending.
Forbes Advisor discovered in a recent survey that 58% of participants use their cards as their main way to impulse buy. The same survey discovered that only 23% of respondents felt the same way about cash. This is because cash is more tangible than cards; you can run out of cash, but a card feels like it has unlimited money on it.
Many young people are even now forgoing their cards for cash to control their spending — one popular method online is called “cash stuffing” is a particularly popular way of doing this. With this approach, you allocate a set amount of cash each month for all your expenses, like groceries, bills and entertainment. Once you run out of the cash for that expense, you can’t spend in that area until your budget resets next month.
Lily W., a nurse who goes by @lilyrnbudgets on TikTok, told Moneywise in 2023 about how cash stuffing helped her pay off $17,000 in credit card debt.
“When I started working … I realized very quickly, I needed [a way to control my spending],” the 22-year-old TikToker said. “And I found cash stuffing through YouTube.”
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Don’t let cash sit
Cash may be great for getting your spending under control, but if your concern is growing your wealth, it’s less than ideal. So while you may be tempted to stash your extra cash under your mattress to save for a rainy day, it’ll end up costing you.
If you put $300 a month into your retirement account, assuming a modest 9% return, in 30 years, you’d have $490,707.14. And that doesn’t even factor in any possible employer match contributions if you have a 401(k).
Meanwhile, if you put that same amount of cash in an envelope, you’d have $108,000 stashed under your mattress. It’s still a sizable sum, but you’ve lost out on the opportunity of compound growth. (And what’s more, after 30 years of inflation, your $108K is going to be worth significantly less.)
Of course, how much cash you keep on hand — and how aggressively you invest — depends on your goals, your age and your household’s spending habits. You may want to talk through your options with a professional financial adviser to help you find the right balance for you.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
