Living in a Cash Society

Peru functions on cash.  There are some stores (mostly restaurants and shops geared toward tourists and grocery and department stores) that accept credit cards, but the bulk of our lives here are lived with cash and most people pay for purchases with cash.  It's unusual to be behind someone paying with a credit card and it really does take much longer than whipping out cash.  (Most of the time when you travel, cash is just easier given that most credit cards have a 3% foreign transaction fee- it's cheaper to get money from ATMs or exchange US money you bring than pay those fees.)  We have a credit card without the fees, but given that we usually have to show our passport to use it, we just stick with cash.

I have seen articles based on studies that suggest people tend to spend more when using credit cards instead of cash (here's a Dave Ramsey Q&A about it.)  I have long suspected that my personal money personality means I spend the same regardless of payment mode.  In the states, I charge everything I can on a credit card that gives me cash rewards and I've always paid my bill in full each month so I haven't gotten tripped up on interest charges.

Spending in cash here doesn't seem to make me any less likely to spend money (though Peruvian money still has a little bit of a monopoly money feel to me....but since I translate virtually everything I buy into dollars anyway, I'm still thinking about the value I'm getting for whatever I purchase).

Paying bills here is quite different than in the states.  I mentioned the bill delivery system before (bills taken around to homes by the company, e.g. the internet provider or the electric company).  Once you get the bill, you take the bill and your payment to an agent (they are all over the place, some you can pay the bill without a commission and some you pay a small commission, like 30-40 cents per bill).  These agents may be in shops like a corner convenience store or a pharmacy.  If you are making a deposit to an account, you can go to a bank and make a deposit into the bank account (the bank also takes a small commission, which just means the person getting paid receives less money than you paid them, so it's kind of like PayPal fees that way where the seller takes the hit.)  There isn't an option to pay online or set up autopay as far as I know.

We have the following bills per month.

• Rent (paid by depositing our money at the bank; I always take A along with me because moms with small kids get to use the preferencia line which usually has between 2-4 people waiting instead of 30+.)
• Mirabel's school tuition (paid at one specific Caja, the agents who broker money payments; in this case, there is only one location that takes money for her school).  I am hoping we're in the free and clear zone from here on out, because I tried to pay last month's tuition 6 times before I was finally successful.  Last month there were a number of issues which have all been resolved now. This month, the electronic file was there, on time, with the right amount due.  
• Electric bill (paid at an agent (BCP) that doesn't charge a commission)
• Internet bill (paid at an agent (BCP) that doesn't charge a commission)
• Water bill (used to be paid at any Scotia Bank agent because there was no commission, but now they charge 1 sol, so I switched to paying at Interagente which charges .8 soles (or 80 centimos) per bill.
• Paying our empleada (cash given to her at the end of the month)

This might not seem like a big deal, and it's really not that big a deal to me- I just take the bills and try to pay them when they arrive.  But sometimes the bills never come (I assume the delivery person loses some each month or something).  In that case, you need to realize the bill didn't come, take an old bill, have them look up your name and pay it.  This has happened twice with our internet.  One time, we got a robocall telling us to pay or else they would turn off the internet.  This last month, when I went to pay the bill, I was told I owed for two months.  Or you can wait for the notice that says you are going to have your water or internet shut off if you don't pay by X date.  And sometimes the lines wherever you want to pay are too long, so you plan to go back later.  Or the system isn't up to date and doesn't have your bill in the system.  I think that for the 5 bills, I probably make an average of 10 attempts per month to make the payments.  And there is a part of my brain that is constantly thinking about bills, when they come, when to pay them, if they came, etc.  

You also need to save the receipt you are given with each payment in case the company comes back and asks you to pay again so you can prove it was paid.  Saving the receipts for our payment is actually a condition of our lease.

Then we also have to ensure we have enough cash on hand to take care of other expenses like groceries, doctor visits, and anything else we purchase.  I feel like I am constantly working to track/maintain our cash flow and that paying with credit cards and settling up at the end of the month and paying my bills online is much easier. Plus, I like the cash back that I receive that way, since it makes it seem like I get a little something for my purchases.  (Yes, I know that stores pay a convenience fee to the credit card companies, and if I purchase from a small retailer I specifically try to pay with cash or check so they get a higher profit.)

What about you?  Are you someone the cash envelope system saved? Do you prefer to charge everything?  Or are you still a check writing aficionado?