I have finally found a good reason to pay with cash instead of debit or credit cards.
Paying with cash gives you a graceful way to avoid being railroaded into those pre-set tips used on payment terminals. You can still tip, but you decide how much. It might be as simple as saying, “keep the change.”
When I wrote about tipping in a recent newsletter, a couple of readers mentioned that they use cash to give themselves more control over tipping. And then I found an online list of reasons to pay cash, including “less pressure to tip.”
I’m not a fan of cash, particularly since we got those plastic $5, $10 and $20 bills. Fold them up and they stay permanently creased. When you try to straighten them out, they fight back. My current favourite way to pay for stuff is by debit or credit via Google Wallet. I have at least half a dozen payment apps loaded on my phone.
I listed some uses for cash in another recent newsletter, including having money to buy a poppy for Remembrance Day, to give to homeless people and buskers, and to tip people on the fly in hotels when travelling. Cash is also a tipping hack, but you have to prepare.
Carry a mix of bills so you control how much change you get. Having some loonies and toonies might help you customize your tipping.
The point of cash is not to duck tipping altogether. It’s much more about deciding for yourself how much to reward good food, good service and good people. Are you as tired as I am of machines telling me how much to tip?
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Rob’s personal finance reading list
A classic take on home design
The federal government is talking about reviving the use of standard home blueprints, which were employed in a big postwar building boom. Here are the plans for a 1.5-storey home, with comments from people with family who lived in these homes. Now for a look at how stretched housing affordability in Canada is right now.
Talking turkey about holiday dinners
The food lab at Dalhousie University on the cost of a turkey dinner for a group of four to six people, and on the broader trends in food inflation. Food inflation has to be one of the most talked about personal finance storylines of 2023.
They retired young – how’s it going now?
Checking in on people who were featured five years ago in a story about F.I.R.E., which means financial independence, retire early. Among them is Kristy Shen, who was a guest on an episode of the Globe and Mail’s Stress Test personal finance podcast for Gen Z and millennials. The word freedom comes up a lot in this article.
A debt time capsule
I found this online – a transcript of a conversation I had with Steve Paikin in 2013 on his TV show The Agenda. The topic: Household debt – how bad is it? Debt levels were soaring then, but low interest rates kept things manageable. Today, we have high debt loads and high rates. Keep your eye on this storyline in 2024.
Ask Rob
Q: I already have house insurance and car insurance. Now my broker is telling me I might want to think about personal cyber insurance. They point out that Canadian households are seven times more likely to experience cybercrime than a house fire ... data breaches, identify theft, etc. I’m not looking to spend even more on insurance, but would be most interested in your take on whether or not cyber insurance for individuals is good value.
A: It looks like you can add coverage against cybercrime by adding an endorsement to your home insurance policy, or on a standalone basis. This coverage can protect you from online fraud, data breaches and damage from malware. The cost may run from roughly $100 to several hundred dollars a year, depending on the amount of coverage you buy. The website EasyInsure shows a $25,000 cyber policy for $100 annually, with a $500 deductible. I’m not sold on this coverage just yet, but I’m open to arguments in favour. Anyone?
Do you have a question or comment for me? Send it my way. Sorry I can’t answer every one personally. Questions and answers are edited for length and clarity.
Tools, Explainers, Guides and Charts
The story behind Boxing Day, the day where people rush to buy all the junk stores couldn’t sell earlier in the year.
The Money-Free Zone
A playlist of my favourite songs of 2023.
On social media
Major progress in Canada on reducing child poverty.
What I’ve been working on
- Investors, this is how fast those comfy returns on cash will drop in the years ahead
- A new frontier in parenting costs is helping your homeowning kids afford their mortgage
- Travel rewards are great, but paying with debit is cleaner money than credit cards in these tough times
More Rob Carrick and money coverage
Subscribe to Stress Test on Apple podcasts or Spotify. For more money stories, follow me on Instagram and Twitter, and join the discussion on my Facebook page. Millennial readers, join our Gen Y Money Facebook group.
Even more coverage from Rob Carrick:
- 🎧 Catch up on Stress Test: Why millennials and Gen Z are Alberta-bound for a more affordable life • Rising interest rates brought pain for new homeowners - and opportunity for house hunters • Why more Canadians are choosing to be childfree or delay parenthood • Love in the time of inflation: How to manage rising costs when dating • You're not bad at money - you're suffering from money shame • Retirement might look different for Gen Z and millennials. Here's how to plan for it • Recession-beating tips for the job market, housing, investing and the cost of life • Is the middle class dead for millennials and Gen Z?
- ✔️ The housing file: A house isn't special. Get your head straight about the reality of home ownership • The good, the sad and the unaffordable: Saving for a home downpayment in Canada's big cities • Property taxes are popping in some cities - how worried should you be about other tax hikes? • Our other real-estate problem - people have too much wealth tied up in houses • Borrowers and savers, here's how to time the eventual rollback of interest rates
- 📈 Investing: Canada's top digital broker is TD Direct Investing, with an assist from the TD Easy Trade app • 2023 Globe and Mail ETF buyer's guide part one: Canadian equity ETFs • For the ultimate in cheap investing, check out the Freedom .08 ETF Portfolio • Yes, there is risk in Canadian bank deposits for the unwary and complacent • CDIC covers bank deposits, but who protects your investments if your broker goes bust? • Answers to your questions about the low-risk ETF paying almost 5% • Happy fifth birthday to one of the all-time best investing products for everyday people • An investing strategy that wins cleanly over the long term by outperforming in bad years like 2022
- 💰 Your money: Mortgage holders, savers and GIC investors, it’s time to change your thinking on interest rates • How much debt is each generation of Canadians carrying, and how do you compare? • For the sake of their financial futures, young people should leave Toronto and Vancouver • This practical new spin on a savings account might just peel you away from your big bank • Rental fraud grows amid rise in fake, falsified tenant applications • Are Canadians worse off financially now than in the 1980s? • From groceries to auto loans, here’s how much more it costs to live right now • When saving for retirement, should you change your asset mix over the course of your career? • Do retirement income needs always rise alongside inflation? Not necessarily • When the bank suggests you lock in your variable rate mortgage, it has an angle
