This Is How Much Cash You Should Have at Home

This Is How Much Cash You Should Have at Home

Despite living in an increasingly digital age, cash is still important, especially in emergencies. We look at how much cash you should keep at home and why?

We live in a digital age where a large amount of our daily purchases and financial transactions are completely digital. With online banking and ability to use your phone as a substitute for your card, it is becoming increasingly rare for people to walk around with cash. 

It is very easy to become overly reliant on one payment method, and in cases where your card no longer works you could find yourself in a difficult situation. So here's why it is still important to keep some cash stored safely at home. 

Imagine this scenario: a power outage hits your area, and with it, the payment systems go down. Suddenly, your credit and debit cards are as useful an umbrella with a hole in it. This is where cash comes to the rescue. Having cash readily available means you can still buy essentials like food, water, and other necessities, even when electronic payment options are out of commission.

So, how do you determine the right amount of cash to keep on hand? It depends on a few factors:

  • Your Needs: Consider your typical expenses and how much cash you might need to cover them for a short period. This includes groceries, gas, medication, and other essentials.
  • Emergency Preparedness: Experts recommend having at least a few days' worth of expenses in cash. This ensures you're covered in case of emergencies like natural disasters or power outages.
  • Household Size: The number of people in your household will also influence how much cash you need. Larger families may need more cash on hand to cover expenses for everyone.

The founder of The Wallet Moth finance website, Yasmin Purnell recommends that you keep enough cash on hand to afford "temporary accommodation, food and drink, gasoline and medication." She added that "having access to $1,000 in cash at home would ensure you can at least pay for immediate expenses in the case of a national emergency," she said.

Once you've determined how much cash you need to keep at home, it's essential to store it safely. Here are a few tips:

  • Choose a Secure Location: Find a secure spot in your home to store your cash stash. Consider a fireproof safe or a locked drawer or cabinet.
  • Use Discretion: Avoid sharing information about your cash stash with others, especially strangers. Keep your cash stash private to minimize the risk of theft.
  • Consider Small Bills: Keep your cash in smaller denominations and coins, making it easier to make purchases and receive change during emergencies.

Even though digital payments are convenient, having easy access to cash will help you be prepared for any uncerttain circumstances.