Smart Places to Keep Cash

April 1, 2013

cashThere’s nothing more liquid than cash. Having access to cash when you need it is an important part of financial planning.

It’s not just about keeping cash in an emergency fund, either. You need to make sure you have access to cash even during times when you might not have immediate access to your bank account.

Immediate Cash: Keep a Small Stash

I like to keep at least $50 in my purse so that I am prepared for situations in which cash might be needed. Sometimes, at the farmer’s market, or at other local shops, cash is necessary for purchases. Additionally, if I’m stuck somewhere, or if I’m splitting a restaurant bill, a little cash can go a long way. However, you don’t want to keep too much cash on your person. Think about how much you could afford to lose if you are robbed. I don’t like to keep more than $200 (and that’s stretching it) in my wallet.

If you have a major purchase to make (like a TV), it’s safer to just use a credit card and pay off the balance immediately.

Don’t forget to keep cash in your home, too. I have a larger stash of cash in my home, in a fireproof/waterproof safe with my vital documents. Keeping this cash at home can be helpful for when you have to leave quickly, in an emergency situation. When a California earthquake knocked out all of the power throughout the West the summer following my junior year in high school (and just as we left on vacation), it was three days before we could access our money via ATM or use our debit cards – and we didn’t even live in California! The fact that my parents had a stash of cash meant that we could still do what needed to be done, even without bank card access.

Online Money

Don’t forget to keep some money in a digital account. If you need to make a P2P payment, or send money digitally, you want that accessible. My PayPal account is connected to a credit card so it’s easy to send money – even if my PayPal balance is low. It’s also possible to use a digital payment provider like Dwolla or Google Wallet to send money electronically in a hurry. Consider these options for quick cash when digital payment is a possibility.

Easy Access to Bank Funds

Don’t forget an emergency fund that provides you easy access to bank funds. You can keep the money at a bank insured by the FDIC (or a credit union insured by the NCUA) so that it is protected, and you have access to it quickly. I like to have a base emergency amount – about $1,000 – at a local brick-and-mortar so I can get at it easily via debit card or ATM, or go in and get what I need in person.

However, it’s also possible to get quick ATM access from high-yield savings accounts online. You can keep a larger amount in these types of accounts, getting a bit higher yield while the money sits there. Make sure you do have access to the money, since if you don’t have a debit or ATM card to access the cash, it can take three to four business days for an ACH transfer to put the money into your primary account.

I have money in these types of accounts as well. However, the bulk of my emergency fund is actually in a taxable investment account. I have access to quick cash from multiple sources if I need it, and it will hold me until I can liquidate part of my investment account.

Where do you keep your cash? And do you have a plan to access it in an emergency? Leave a comment!


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Miranda writes about personal finance almost every day. An experienced freelance writer, she's covered your money online and in print from every angle and is always looking for new ones.

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3 Responses to Smart Places to Keep Cash

  • Robert Jacobs

    My wife and I use a simple money market account with check writing and a debit card. In addition, we keep a nice sum of cash in a secure location in our house safe. This seems to work well for us.

  • KK @ Student Debt Survivor

    I have online and bricks and mortar banks so that I have access to cash quickly if I need it. I also try to keep $100 on hand at home and at least $20 in my wallet at all times, just in case I need it.

  • William @ Bite the Bullet

    Definitely a good idea to have a stash of cash in the home. When power goes out, some stores reopen, but they only take cash. And a power outage is the highest risk “event” for everyone. Water, dry food and cash, the three most basic emergency elements to have. (oh, and never have less than a quarter tank of gas, either. 🙂