Digital payment platforms like Venmo, PayPal, and CashApp have reduced our reliance on physical cash, but it's still important to keep some cash on hand for emergencies. The amount of cash you should have at home varies depending on expert opinions.
- Keep Cash to a Minimum: Financial experts generally agree that you should minimize the amount of cash at home due to security concerns like theft and fire. Danielle Miura recommends keeping around $100-$200 for small expenses or emergencies. Ryan McCarty suggests not letting cash exceed 10% of your overall emergency fund or $10,000.
- Enough for Emergency Expenses: Yasmin Purnell advises having access to $1,000 in cash at home to cover immediate expenses during a national emergency.
- Less Than $1,000: Jesse Cramer suggests keeping less than $1,000 at home, emphasizing the safety of banks in today's digital world.
- Keep Your Cash Safe: Matthew Dailly recommends using fireproof, bolted-down safes for cash storage to protect against damage and theft. Jay Zigmont suggests strategies to prevent impulsive spending.
- Don't Panic: It's not necessary to withdraw large amounts of cash to protect against emergencies, as banks are generally secure, with FDIC insurance covering up to $250,000 per account.
- Cash Loses Value: Money in a bank retains its value over time, while cash loses value due to inflation, so keeping large sums of cash at home is not the most financially prudent choice.
Ultimately, the amount of cash to keep at home depends on your individual circumstances and comfort level, but experts generally recommend keeping it to a minimum and prioritizing safety and financial security through other means.
Source: Yahoo Finance
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