Are you asking yourself, 'how much cash can I keep at home?' Financial freedom and security continue to be a popular topic. People are always looking for ways to keep their money safe.
That is especially true after recessions and global financial crises. It is a discussed topic and quite personal, as anything to do with finances should be.
Whilst there are systems to keep your money safe, some people have lost trust and prefer cash at home. In this article, we will take a look at how much money you can keep at home. This is taking into consideration security aspects, what the law allows, and so forth.
We will also look at the pros and cons of keeping cash on you. Let's get it into the meat of it all, shall we?
Why do people keep cash at home?
We live in a world that is striving to create a paperless society. A lot of first world countries are going this route. The campaign's aimed at a greener and more convenient way of transacting.
By getting people to use less cash, it means less printed, which is excellent for the environment. Despite all these efforts, some people still keep cash at home.
In case of emergencies
Reasons for keeping cash at home could be due to many different reasons. Some choose to save some money at home, in case of emergencies. Cash is easier to use, and you don’t have to worry whether a place takes your card or not.
Cash is usually universally accepted. Also, if systems are down and you can't use online money transfers, money doesn’t let you down.
It reduces your credit card bill.
Using cash can also help you reduce your credit card spending. With money, if you don’t have it in your hand, you can't take the product off the shelf. This is usually a great way to keep you out of debt and buying things that you don’t have the money to buy.
You can also keep track of your daily expenses.
No longer governed by power cuts.
When you have cash ready, you are not affected by power outages, which affect the transactions. Having cash on hand means that you can deal with issues that need money, at a moment's notice. Also, anyone can use it, no need for personal identification numbers.
It is flexible and versatile.
Having cash on hand gives you flexibility and versatility. The age-old saying goes, cash is king. It is what guides a lot of people to the decision of keeping cash at home.
It gives you a type of freedom, which doesn't quite exist with online transactions.
Avoid complicated banking procedures
The other reason why people keep cash at home is to avoid complicated banking procedures. With cash, there is no need to understand banking language.
You may have better peace of mind
If you're one who has been burnt once too many times by investing their money, or by a defunct banking system. then having your money where you can see it and where you can handle it physically, may give you peace of mind.
You avoid bank charges
Keeping your money at home means that you can avoid bank charges. Each transaction that you do online, or using plastic money, incurs bank charges. When you use cash, you avoid these charges and have the money you started with, when you spend, it's to the exact cent.
What are the risks of keeping cash at home?
Whilst keeping cash on hand has its benefits, it also has its risks. Let's take a look at what some of those are. There is the age-old argument of security.
Keeping cash at home can make you a target for home invasions. It also means that you could have your money stolen by someone in your home. It's an unseemly situation, but it is not unheard of.
You will need to find different secret places to hide your money and make sure that it is safe. The ideal scenario is to own a fireproof safe in your main residence, but hidden away and not immediately visible. The main aim is to ensure that you don’t create bait for anyone with sticky fingers.
Insurance companies have different limits of cash they will cover you for when you keep it at home. This's designed to have more people bank their money. This is also governed by the laws of the country and city.
Whilst insurance will cover and protect you when your money is in a bank, the same can't be when you keep money at home.
Limits differ, but they are not usually a lot. If you have more money than the company covers, and the money's stolen, consider it a donation to the burglars. It always helps to check on what you're covered for before deciding to keep cash at home.
It is untraceable.
The only time this is a plus is if you're involved in something illegal and don’t want people knowing. Anyone on the straight and narrow, this is a disadvantage, if misplaced, or stolen, you have no way of tracing it back.
Your money won't earn any interest
Besides your money getting stolen or misplaced, one of the risks is that it won't earn any interest. The amount that your money makes you is dependent on your bank and also on your country's economy. These factors also influence people's faith in the banking system.
Are there laws about how much I keep at home?
Your finances are a personal matter. As such, only you will know how much cash you need to have on hand. Taking into consideration the pros and cons, it should be easier to come up with a decision.
The exact amount of money is also determined by how much you are willing to risk losing, or you misplacing. Think about how willing you are to lose the amount that you are keeping at home.
Homeowners insurance is there to help you get back what you lose in home invasions. They will reimburse cash, but only up to a certain amount.
Whilst there isn’t a law that will tell you how much money you can keep at home in cash, think about the security factor. Also, consider what you will need the money for. It will help you set the limit for yourself.
Also, large amounts of cash can be suspicious by law enforcement authorities. You may find yourself in a sticky situation, of having to explain to yourself.
Is there a specific amount of cash to keep at home
Once you have pinned down what you may need to use cash for, you can come up with this number. That also depends on where you live and what the cost of living is like in that area.
For some, $500 in cash is a fair amount to keep around the house. Whilst for some, $1,000 is what you will need.
$1,000 is a recommendation that helps keep you afloat in the event of about any quick emergency that may arise. Whatever figure you arrive at also depending on your lifestyle, keep it in small amounts, that is easy to use. If you are looking to take up less space, then you can think about keeping the money in larger denominations.
One way to figure out how much to put aside is to calculate three to six times your monthly living expenses. It will help you be in a comfortable position for at least three or six months if you can not access your funds in a bank. You can rest assured that the basics are covered and taken care of.
Cash's valued over other payment methods. It is easier and simpler to understand. But keeping it at home has its disadvantages.
There may not be an exact amount, but you can come up to an acceptable average by looking at your lifestyle.
After weighing the odds, we hope this helps you come up with the amount that is better suited for your lifestyle. Always remember to play your cards close to your chest when it comes to keeping your money at home. Keep safe.
About The Author
Reece Thompson: Reece has been involved in property in one way or another for the past 10 years. He's gained a lot of experience when it comes to the home, kitchen and garden. He shares his knowledge with enthusiasm and honesty.