The Barefoot Investor has praised a single mother after she claimed to have saved hundreds of dollars by paying in cash at the till instead of with a debit card.
Scott Pape praised the single mother of three after she wrote him a letter to share her success story.
To make ends meet, Rita explained that she became a cleaning lady for three wealthy women and always paid with cash instead of a debit card at the cash register.
She added that she would use her money to pay her bills, including rent and groceries, claiming it would save her hundreds of dollars in fees.
“I’m confident that not only did it save me hundreds of dollars in fees that you wrote about last week, but it also helped me stay on budget during an extremely stressful time in my life,” Rita wrote.
Scott Pape has praised a single mother of three for saving money by using cash. However, he added that cash was on the way, despite Australians saving as they avoid cashless methods
“To this day (seven years later) I still withdraw my allowance every week in $50 and $20 notes. Life is simple with cash!”
In his response to Rita, titled ‘Housekeeper gets PhD in finance’, Mr Pape praised the single mother for discovering that using cash saved her money.
Mr Pape referred to a study conducted by the University of Melbourne and the University of Adelaide, which analyzed data from 11,000 participants and found Australians were likely to spend more money without cash than with cash.
However, he argued that the use of cash is disappearing despite its money-saving potential.
‘Cash is going Kevin Rudd’s way. (It pops up every now and then to let us know it’s still relevant, only to fade back into obscurity),” Mr. Pape wrote.
“Cash is now only used for 16 percent of transactions, and you can be sure that the Commissioner of Taxes is the main person cheering its demise.
‘After all, the ATO’s supercomputer has so much data on you that it would make Mark Zuckerberg drool (and it’s only getting more powerful with artificial intelligence).
“But for all its computing power, it’s still no match for a single mother with a dustbuster.”
It comes after Australians rushed to withdraw money from ATMs across the country as part of a battle against the rise of digital payments.
The mass withdrawal event, called “Cash Out Day,” was organized by the Cash Is King Australia Facebook group and took place on June 14.
“Payout tomorrow June 14th,” the group wrote. “Bank branch or ATM, take it out, use it and don’t lose it.”
The mother, who worked as a cleaner and was paid in cash, said she saved hundreds of dollars in fees by avoiding cashless payment methods
Many Australians shared photos of themselves withdrawing hundreds of dollars from ATMs.
Some even reported that the high demand for cash due to the campaign caused some ATMs to run out of money.
Finder’s head of consumer research, Graham Cooke, told Daily Mail Australia that those who paid cash could avoid additional card fees.
While some larger companies include these costs in the price of their goods and services, many smaller companies charge their customers with banking fees.
The most popular way to pay by card is tap-and-go, accounting for 95 percent of in-person transactions, and also the most expensive.
While inserting a card into an EFTPOS machine typically costs a merchant less than 0.5 percent per transaction, using contactless Visa and Mastercard payments can cost up to 0.5 to 1 percent per time for debit cards and 1 to 1.5 percent for credit cards.
On a $100 purchase, the average added cost is 28c for EFTPOS, 52c for using the Mastercard network, 47c for using Visa and a whopping $1.88 for digital payment provider Square.