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Cash and relationships: the loss of tangibility

Tangible: the exchange of money that one could handle built relationships

Cash used to be tangible. You could touch it. You could count it.

You could smell it. It was dirty. So many hands passing it back and forth.

You could feel its power because you had physical control.

Cash literally represented part of your identity because for that brief tangible moment, you could feel rich.

You were paid in cash, weekly, receiving that precisely distributed little brown paper packet, 20 shillings and sixpence (don’t forget the change), please. Or more!

You could use it then, amazingly, to communicate, to build relationships with your retailers, vendors, employers, friends.

Ritually, once a month, 70 years long ago, thruppence (or sixpence) was enough to take “de bus” to town. I know, I was there and back then, Bermuda was still under the base 12 duodecimal system. Or you’d ride your no-gear bike, basket in front, men’s pant legs clipped, ladies’ skirts pulled up with clothes pegs, all to avoid bike chain grease.

You’d stand in line, say, at the “lack-o-light company” to pay your utility bill, then rotate same errands around various businesses.

Bill paying, settling your accounts, was a social event.

Heading to town was a way to connect with the community, almost a party at times. Everyone felt collectively involved in managing their money, trading tips on bargains, family interests, upcoming events.

Getting some real gossip was an additional bonus.

Plus, it felt good to be part of the community.

There was that personal pride, the satisfaction in not owing anyone for another month.

Then, you took whatever you had left home, stuck it in the cookie jar or allocated various sums to your next week’s or month’s budget envelopes.

After carrying around heavy coinage and bills, settling up and spending down left a tangible financial cash hole in your pocket or purse.

Emotionally, you experienced the real loss of feeling “somewhat” rich, if even for a moment.

But you knew exactly what you had left to budget until next payday!

Cash was real.

You saw it, you held it.

It’s there; then, it’s gone.

Today, it is no coincidence that there are numerous websites and social media chatter reinvigorating this time-proven basic budgeting while introducing using the 100-envelope challenge and related methods for the digital age.

Cheques as a non-cash management evolution

Originating in the eastern Mediterranean during the first millennium as a convenient form of payment between local merchants, cheques became more versatile through the development of negotiability in 16th-century Europe.

The suppression of banknotes in 18th-century England further promoted the use of cheques.

In the United States, 19th-century legislation discouraged other payment methods and eventually led to a nationwide cheque payment system.

In the 20th century, under the US Federal Reserve’s leadership, cheques expanded rapidly and became the nation’s default payment method.

Cheques had ease of use, which provided advantages over other payment methods, but created risk to businesses and banks. Cheques’ evolution was sophisticated, but they came with a high cost relative to other forms of payment, as documented by The Evolution of the Cheque as a Means of Payment: A Historical Survey Federal Reserve Bank of Atlanta Economic Review, volume 93, number two, 2008.

So, after 400 of years of metal coins as cash, followed then, by paper money in Bermuda, then implementing the very traditional passbook saving method, the infrastructure to handle efficient cheque processing was available on a global scale.

International and local banks moved on to personal chequing and savings accounts.

Prestige accompanied the ownership of a chequing account, taking out your chequebook carrying some personal graphic image statement on its cover – that reflected you. It felt important.

I remember distinctly young women excitedly talking about having their own chequebook and chequing account where their spouses deposited household budget monies each month. They had control.

Asking them how much their spouses earned, did he have any life insurance, pension etc, was met with perplexity, bafflement, and hostility.

They did not know the half of it.

Paper checks still effectively represented cash, because you had them in your hand. But you had to make sure you endorsed them and then you had to take them to the bank or mail them to your household vendors.

So, now you were standing in line at the post office. Not so much fun. Certainly, no relationship building.

Money, as part of your identity, was your ability to pay by what you held in your hand. It was real!

You knew that if you spent it all, our purse was empty.

The tangibility of person-to-person finances has pretty well disappeared.

Anonymity replaces relationships

That was then.

We have moved onto credit and debit cards and completely anonymous digital cash transactions.

Banks have far fewer teller stations and personal finance meetings.

Near banks, such as something like a Venmo VNM, generally, have no personal interaction or any teller lines. They are completely internet-access dependent.

What’s gone is the loss of personal communication as finance becomes more and more remote, more prevalent where you have a problem you have to call somewhere to reach some foreign-sounding person.

And if you're lucky to reach them, they don’t know you – they may actually be a robot – and you may not be able to get your issues resolved.

The sheer frustration of client interactions with banks, investment firms, and every digitally-structured business has grown astronomically – from feeling powerful, in control of your finances, to a payment pawn in the game. How these processes may change in future is unknown.

Adding to that complication, what happens if the internet goes down?

Cash is just not cash any more. Stay tuned.

Readers, this is an excerpt from the start of my new book, Bermuda’s First Investment Primer.

As each chapter is finished, it will be published for free in downloadable PDF format and in readable FLOWPAPER, on my blog, Bermy Island Finance Blog http://marthamyron.com/

Martha Harris Myron is a native Bermudian and a retired international tax and financial planning professional with a Master-in-Laws in International Taxation and Financial Services SCL. See her articles, webinars, books and YouTube vidcasts on Bermy Island Finance Blog http://marthamyron.com/. Contact martha.myron@gmail.com

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Published September 09, 2023 at 8:00 am (Updated September 11, 2023 at 8:11 am)

Cash and relationships: the loss of tangibility

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