Cash Machine Inflation

Prices rise. Sure, the value of your investments can go down as well as up, as the financial adverts are so keen to advise us, but the one constant in life is that over the long term everything rises in price, if not necessarily in overall value. Any item you buy today can be assumed to have cost much less just ten years ago.

I forget what age it was I started to notice the price of certain things and framed my own point of reference. There is certainly a point when you look back at the past and just can’t imagine things being so cheap. Reproductions of old newspapers show cover prices of around 2p and old television shows date themselves with economic references (note the episode of Some Mothers Do ‘Ave Em where Frank Spencer is intrigued by the prospect of a job that pays a whole £3000 a year). Topically enough I do remember an early 80s television report about the horrors people were experiencing as petrol prices broke through the psychologically important £1.50 per gallon barrier. I also remember the day when in a father-son bedtime chat I asked my father just how much he earned, and I remember being incredibly impressed that his pay before tax crept above the £1000 mark every month. To me that was a huge sum of money and I was convinced we were millionaires.

My own personal reference point is noting just how much it is sensible to withdraw from a cash machine in a single transaction. When I first started banking with real world (as opposed to pocket) money it was just £5. This was at the start of my university life when, armed with lots of useful advice about budgeting and knowing how to manage your money I used the experience gained by a summer of working for accountants to produce a lovingly crafted budget spreadsheet. Even if I do say it myself it was a work of art, my monthly income from my parents carved up so that money was set aside for the next terms rent and the rest shared out to give me a daily budget. Anything spent over or under that amount was amortised out over the remaining days of the month, thus ensuring that I would end the month having spent exactly what I could afford, no more and no less. As chance would have it the first monthly total worked out at just under £5 a day, so part of my lunchtime ritual was to queue at the cash machines in Alexandra Square and withdraw my daily budget, a crisp £5 note that was to buy me both lunch and dinner any other sundries I needed from the chemist (my drinking entertainment money came from another account and so wasn’t factored in here). So strict was I about this financial salami slice that if the machines had run out of £5 notes and were only giving out tenners, I would instead queue up inside and make an over the counter withdrawal of my allotted amount.

Yes of course that sounds anal, but that attitude meant that when I finally went crawling for an overdraft in the summer of my final year, the personal account manager in the branch was astonished I had lasted that long.

Now even in 1991 you would actually struggle to find a cash machine loaded up with fivers on the high street and I suspect the only ones I am ever likely to see were the ones on the university campus, specially configured to take into account the lesser resources of the student population who patronised them. I sometimes idly wonder just how long it had been since cash machines stopped dispensing £1 notes, as presumably they must have done at the very start of their existence.

So of course once out in the real world, inflationary pressures meant that the minimum sum available was £10, an amount I always made sure to spin out for as long as possible. I’m sure everyone is familiar with the phenomenon of money always running out faster when you have it on you. I don’t trust myself to carry large sums of cash around, simply because I know I will spend it if it is readily to hand. I still remember those horror days when my finger slipped and I withdrew £100 instead of £10 and had to work hard not to blow a fortnights spending money in too short a period of time.

As the years go by, a single £10 note never quite stretches as far as it should, and so cash machine inflation kicks in again, raising the bar to £20 as a sensible minimum withdrawal for day to day living. I still hate doing this. I’m still convinced I can spend £20 far quicker than I can two lots of £10 but as time goes by I live in fear that the number of machines prepared to dish out tenners grows smaller by the day.

The other problem here is that as far as my spending habits are concerned, £20 is still rather more than I need at any one time. This particularly becomes a problem when you have visited a machine to get the cash to buy something small. There is nothing I dislike more than trying to pay the bloke in the station kiosk for a newspaper with a twenty pound note and so for politeness sake I’ll pick up a drink or a bag of chocolates just to bump the total up to a more respectable amount. That way I can offer my cash machine fresh crisp note with the confident swagger of a man for whom it is piffling change rather than as the evil bastard who is going to rob the poor man of his days float all for the sake of a copy of The Sun. Even if that does mean your precious cash reserves go down just a little faster due to the unwanted extras you have just splashed out on.

This brings us to the other dilemma of course. What happens when your spending plans necessitate the withdrawal of £20 but you are also after small(ish) change for the newspaper stand. Asking the machine for a straight 20 is like playing some exciting lottery machine. Will it decide to dip into its precious cargo of £10 notes and give you two of equal value, or will it elect to go down the simple route and neatly present you with the inconvenience of a purple large one. Those in the know assure me that the machine is programmed to calculate a sensible split of denominations when processing a request, but we all know that is bollocks. Cash machines will sense what you need the money for and dump it on you in the most inconvenient manner possible.

This is why I’ve taken to introducing my own inflationary pressure on the cash machine process. If I want £20 I’ll ask for £30 instead, thus forcing the evil box of electronics to offer me one note of each type. Victory is mine. I have both the twenty I need to function as a normal member of society, plus the ten pounds I can use for fiddling purchases such as comics or the tissues you never seem to have enough of during hay fever season. Still it can be a problem, as I’m sure I spend £30 far quicker than I would £20. Thus cash machine inflation gets us all in the end.

Next time: when your pockets are swollen with two pounds worth of copper coins, how do you avoid looking like a down and out when you use them to pay for a bottle of water?

One Comment

  1. In 1991, Natwest and Midland machines did fivers, TSB refused. I still find it odd that they don’t do them now.

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