In the age of online banking and credit card apps, many people find themselves short on one important thing: cold, hard cash! When people wonder how much cash they should have on hand, that could mean different things to them.

Some people think of cash as being money in a bank account, so it can be withdrawn or used for purchases anytime.

Of course, the more conventional definition of “cash” is physical money: the actual bills and coins that make up currency. That’s the one we’re going to be describing here.

How much money should you have on hand? In other words, how much money should you have in an accessible place? And how do you balance your cash stash goals with your institutional savings and investments? Let’s take a look!

Why you should have both institutional and physical savings

Saving in different forms is important. For that reason, one of the first pieces of financial advice you’re likely to hear is to create an emergency fund. This cash can help you through unemployment, health issues, and other unexpected events life can throw your way (hence the name).

But what should “in one way or another” look like? Ideally, it should serve as a combination! Here are the advantages of saving some funds in a bank account and some more in physical currency.

Benefits of saving money in a bank

There are numerous reasons why it is wise to keep most of one’s savings in the bank (or other financial institution). It is vital, however, to know how much cash you are permitted to have on hand. We will get to this later.

For one, banks are safer for your money. Banks also offer FDIC protection, which means that customers can receive compensation from the federal government if the bank fails. Additionally, bank accounts are insured by the FDIC for up to $250,000 per individual.

When you pay for expenses using a card, you have a digital record of transactions. Debit cards and some credit cards offer purchase protection that cash purchases do not.

You can use interest-bearing savings accounts to earn awards for keeping your cash at a bank. Even just a percent or two can make a difference.

The benefits of keeping real cash on hand

So, with all the perks and protections that banks include, why would you want to mix it up with cash savings too?

The primary advantage of having money is that it can save lives in emergency situations. When things go wrong, it can mean the difference between barely surviving and being comfortable. As long as the US dollar exists, money will always be valuable, even in disaster situations.

Here are some of the situations in which you should consider how much money you should keep on hand.

How much cash should I have: Different scenarios to consider

Everyone has different needs regarding how much money has to be saved, so there isn’t a single amount that will work for everyone. Here are some suggestions for saving money for typical circumstances.

How much money do you want?

For emergencies

Many situations exist where revenue can be useful.

In the event of a power outage, local stores might not be able to receive electronic payments until the power is restored.

Maybe there’s a problem with your bank, or your account is accessed by a scammer, and you temporarily lose access.

How Much Cash Should I Have On Hand
How Much Cash Should I Have On Hand

Or there could be a natural disaster or a national emergency that lasts for weeks, preventing you from using cards or traveling to the bank for longer periods of time.

You should consider how expensive common essentials like water and electricity can be in case of a medical emergency.

It is best to anticipate that prices will increase in the event of emergencies, so it is smart to have a cushion of cash on hand. Find an amount that works for you in the future, and then double it.

You may also begin making an emergency stockpile of physical items, which you will need for later.

If I lose my job

The general consensus is to save a three-month emergency fund in addition to six months’ worth of expenses. This money is usually safe in a bank account.

Even if you lose your job, you are still able to access your bank accounts and credit cards, so you won’t need physical cash.

As you make your morning savings plan, your plan could be as simple as setting aside one or two months of savings.

If I need secret savings

Financial insecurity can arise from a personal emergency, such as leaving an abusive or dangerous relationship or family.

Many of us dread this, but many women do not know about this in advance.

During times when one in three women are victims of intimate partner abuse, it is essential for women to have a “get out fund.” If financial abuse is part of an abusive relationship, you may be able to obtain your funds through hidden money.

How much money would you have on hand if a relationship ended badly? What would you need if suddenly you were on your own?

Having separate funds for you and your loved ones is nice. If you have kids or are pregnant, you should reserve some money for them, too.

Just in case

Of course, there are also some non-emergent reasons for keeping a sufficient amount of money readily available. Cash-only stores and restaurants still survive!

Having some money on hand enables you to purchase food from a nearby farm stand or travel to a festival where tickets are sold only in cash. You can also save on fees by using a credit card at most stores that charge transaction fees.

If you prefer an astronomical round number, make your initial goal to have at least $100 in your wallet and $1,000 at home.

Finally, keeping some money around for a rainy day is useful, whether the situation is just a gentle drizzle or a hurricane.

When going out

You never know when you might need money. While many places now accept debit cards and credit cards, you can also make Android and Apple pay payments.

For example, a restaurant can only take cash payments or you would like to split the check with your friends. In these cases, having some extra cash could come in handy.

It’s important to not carry a lot of money because you don’t want to become a target for theft, but you should have enough money to buy some food and to get a ride home if necessary. About $50 to $100 is adequate in most circumstances.

If you have young kids

If you have children, you should never be too prepared. You may be able to finance a medical emergency and require some quick money. For example, if you unexpectedly have to sit through a lengthy lunch or dinner with your children and your credit card isn’t working.

You may want to keep some money for other reasons as well, but if you have family, you may want to keep it on you, just be sure not to lose it!

For a day out with your kids, it is a good idea to bring at least $100 in cash. Perhaps more, depending on the day’s activities and where you’re going.

Ideas for quickly saving up cash

If you don’t have very much money at this time, there are a few easy ways that you can get some cold, hard cash into your hands!

You can also find some useful money-saving tips in these advertisements. As long as you have a bank account and have access to a branch or ATM, you can convert any type of payment into cold, hard cash immediately.

4 safe places to keep your cash

Now that you know the answer to, “How much money should I have saved?” it is especially important to have a secure storage plan. Bank savings are more vulnerable to losses than cash is. In this paper organizing project, here are some suggestions for storing all of that important paperwork.

1. Inside a fireproof safe

This is why safes are valuable. They are an ideal place to store money, important files, and other valuables, especially in an emergency. A safe is an excellent investment as long as it is fireproof, waterproof, and thief-proof.

Position your shelter somewhere out of the way and make it a habit to never reveal that you own one.

2. Buried in a waterproof container

This is an incredible idea for true “dire emergency” funds because you don’t want to dig your yard up every time the power goes out.

This tactic requires that you keep your money in multiple layers of protection to prevent it from being damaged by the hazards of the outside world.

For example, you can store it in a sealed plastic bag, an airtight glass jar, or in a metal tin. There are also some great waterproof containers you can buy. Don’t forget to plant it where you dug it up, and let your trusted friend know where it is.

3. Hidden in false home accessories

Want to hide your hard-earned money more subtly? It’s possible to outfit your home with false accessories, such as fake wall outlets, which can conceal small safes. You can also buy fake cans of corn or shaving cream, or fake air vents or drain pipes.

These will be less conspicuous than a fireproof safe, but typically won’t be underground. Avoid hollowed out books, as they are too common for thieves to know to check you.

4. Distributed in different hiding spots

Keeping your funds in one spot means that if something happens to it, you could lose all the money. If you distribute the money among different hiding places, each becomes less risky.

You can also save some change with you in your bag or in your vehicle. You can keep it on hand while you’re out so that you have it on hand when the occasion arises.

Your turn: how much cash should you keep on hand?

It’s your turn to come up with a way for your family to conserve money. You then need to take your savings goal from theory to practice.

The best way to save money is before you ever need to use it. Whether it’s buried, hidden, or stashed securely, you will appreciate having a little cushion in case you need it.

Looking for a simple way to start your savings journey? Use these six steps to examine your savings status if you have no experience.


Please enter your comment!
Please enter your name here