There's an old saying of "cash is king" that you've probably heard before. The phrase has been around for a long time and means that cash is superior to other assets such as stocks, bonds, or certificates of deposit. In other words, cash is much easier to handle during business transactions and superior to other payment options.
What Are the Benefits of Keeping Cash at Home?
No matter the amount or age of your cash, here are the five benefits that come from storing some at home:
- It's Useful During an Emergency
- You Don't Have To Pay Any Fees
- It's Ready To Use Immediately
- You Can Save More Efficiently
- It Can't Be Lost via Scam
Having cash on hand is the financial equivalent of having a fire extinguisher in your home. It's doubtful you'll ever need it, but you'll be in the wrong spot without it.
In other words, it's better to have some cash on hand and not need it than to need it and not have it. This is assuming, of course, that you're keeping it well protected in a safe.
It's Useful During an Emergency
If the recent coronavirus pandemic teaches us one thing, it's always to expect the unexpected. You never know what will happen next; an emergency can be much closer than you realize. Cash is one of the most commonly included items on any survivalist's list of essential items. The last thing you want to do during a catastrophic emergency is dive into the couch cushions to find loose change.
The most significant problem with modern technology is its high reliance on electricity. Natural disasters (hurricanes, earthquakes, tornadoes, and floods). have a strong track record of severely disrupting the power grid.
You can't use a debit or credit card when the card reader doesn't work. You can't withdraw money from an ATM when it has no power. You might not even be able to connect to the internet or make/receive calls on your cell phone during an outage.
Without electricity, you'll have no way to access the funds in your bank account.
You Don't Have To Pay Any Fees
It guarantees that your bank account has various fees woven into the fine print of your agreement.
Standard bank fees typically include:
- General account maintenance
- failing to maintain a minimum balance
- using certain ATMs
- overdraft your account
- committing a wire transfer
These examples are just the most common ones. There's no telling what kind of wording banks have meticulously disguised in their contracts.
The reason that banks use these often excessive and rarely explained fees is to generate enormous profits.
While banks might be providing a service to their account holders, they're also a business that's primary goal is to make money.
The easiest way to achieve this goal is to charge their customers various fees and profit from the interest from loans and mortgages.
Storing cash is not a business, and there are no fees for doing it. You'll never have to worry about maintaining a minimum balance, paying a few dollars whenever you withdraw some funds, or some other ridiculous fee. It's your money, and you can do whatever you want.
It's Ready To Use Immediately
Technology has enabled us to transfer funds immediately by using our cell phones. All you have to do is open up the app, enter the name/number of the recipient, and you can wire them money in a flash. It's hard to beat a high level of convenience like that, but that's still a bit more work than simply handing someone cash.
Transferring money electronically also has the potential for various technical issues. You'll need to access a computer that functions correctly, have a steady connection to the internet, and hope the two banks aren't experiencing any server issues. Cash in your hand is always easy to transfer and immediately available to be spent.
You Can Save More Efficiently
Using a debit or credit card to make a purchase is about as convenient. No matter the cost, you simply swipe, insert, or tap your card into the reader and leave with your new items.
Unfortunately, this level of convenience can be a tremendous temptation for some people and often comes with an increased risk of severe credit card debt. The convenience of using a plastic card makes it extremely difficult to avoid making impulsive purchases.
Spending cash is much more difficult because you can't pay it when you don't have it. To spend the money in your house, you need to put it in your pocket, exit your home, and seek out a financial transaction. That's the exact opposite of an impulse purchase.
There's no limit to the amount of cash you can store in your house. If you aim to increase your savings (short-term or long-term), you can add a few bucks each week to your stash. It won't take long for each contribution to add up, and it's impossible to spend it impulsively.
It Can't Be Lost via Scam
Cybercriminals use a million scams to get their hands on your hard-earned money. Technology provides a lot of opportunities for crime to prosper. Getting ahold of your usernames and online passwords can cause you to lose your identity and a large portion of your money.
The good news is that most banks offer plenty of protection against identity theft. The bad news is that getting them to replace your lost funds can be a significant headache. It can take several months to recover your money, if you can even recover it.
The cash you keep at home is impervious to these online-based hacks, cons, and scams. It's still at risk of thieves with sticky fingers, but these attempts can be easily thwarted by using a safe. It's much easier for an experienced hacker to steal your password than for a burglar to crack your safe.
Why "Cash Is King"
While there's no denying that cash might be king, its reign at the top might not last forever. Society inches closer to becoming a cashless society with every passing day. Technology's evolution and convenience threaten to make cash a relic of the past. For that reason (and a few others), fewer people are storing cash in their homes than ever.
Trusting a bank with all of your money isn't a bad idea. Banks are trustworthy institutions that are insured and banked by the federal government. However, a few unique benefits come with keeping some cash stashed in your home.
As long as you're being smart about protecting your money, there's no reason that you shouldn't own a wad of cash in your home.
How Much Cash Should You Keep at Home?
There's no universal amount of cash that you should have on hand. It can vary significantly from person to person based on how much money you make and own. However, experts recommend carrying around between $100 and $300 in your wallet and another $1,000 to $2,000 at home.
For convenience, your initial thinking will be to withdraw these funds using wills with a larger denomination. There's no denying that it's easier to stash ten $100 bills in your home than 200 $5 bills. Despite being way more bills, you should favor smaller denominations and aim for a healthy mix of $20s, $10s, $5s, and $1s. That might sound like an unnecessary wrinkle, but it will make more sense in a minute.
If you don't feel comfortable handling such a large amount of money, it's perfectly acceptable to reduce it. Again, there's no one-size-fits-all answer for how much money you should carry and keep at home.
You can withdraw whatever amount that makes you feel most comfortable. The fact that you have a stash of cash is more important than its overall value.
The temptation to spend cash can be pretty overwhelming for some people. Money tends to "burn a hole in your pocket" as it begs to be spent.
However, this cash needs to be reserved for emergencies only. It's not a situation where you have to use or lose it.
There's no expiration date for United States currency, and every dollar issued since 1861 is redeemable for the total face value. So you can store the identical bills for decades if you'd like.
Where Is the Best Place To Store Cash at Home?
Pretty much everyone had a secret hiding spot for their cash growing up. Since most children don't have bank accounts, there has to be somewhere to store your allowance and birthday card money.
Using a piggy bank, shoe box, or stuffing it under your mattress was fine when you were a kid. However, these are terrible options for dealing with serious cash levels when you're an adult.
The most obvious answer to this question is to use a safe to store your money. It's also the most effective one. Piggy banks, shoe boxes, and mattresses don't offer anywhere near the same levels of security as a safe.
These options are easily accessible and can also be lost and damaged. It would be quite a spectacular event for you to misplace your safe accidentally, and they're built to withstand an incredible amount of punishment. There's no option to protect your money more effectively than a fireproof safe.
The Key to Keeping Cash at Home Is Protecting It
It's not going to do you much good to keep a bunch of cash in your home if you aren't going to protect it. Removing some money from a bank vault and stuffing it into a shoe box is an excellent way to wind up having a bad time.
Having emergency cash in your home might be a good idea, but using a safe to protect your cash is excellent. Safes can help to cover more than just your cash.
You certainly have essential documents to protect, such as your birth certificate and Social Security card. You will also likely have (or will have) other necessary documents like a marriage certificate, passport, living will, and title deeds.
That's not even mentioning anything you should store safely, like guns, jewelry, and precious heirlooms. There's no good reason to leave these items unprotected.
Visit MyCube today to browse our selection of safes and choose the one that fits your needs. With free shipping and a 35-day free trial, you have nothing to lose and everything to protect.
Modern Technology Fuels Old Scams | The Office of Attorney General Keith Ellison
The Top Reasons People Get Into Credit Card Debt-and How to Avoid Them, From an Equifax Expert | CNBC
How Do Banks Make Money? | Credit Karma
Emergency Essentials: Tips for Assembling a Survival Kit | Tulane
United States Currency | USAGov
Here's How Much Cash You Should Carry Around in Your Wallet | CNBC
The Pros and Cons of Moving to a Cashless Society | The Balance