The use of cash has declined significantly in recent years. However, for some exceptional situations, it may be a good idea to have some money at home to cover urgent expenses, even for just a few days.
This liquidity reserve is also defined, in the personal finance context, as a “payment fund”. It allows a person to cover non-postponable expenses, for example during a prolonged power outage, when cards and other electronic means of payment do not work.
What is it then the amount of cash everyone should keep at home?
Here’s how much cash you should have at home
It is difficult to give a clear and unambiguous answer to this question, because the need for cash depends on everyone’s needs (and expenses).
If you have a good supply of food at home, you may not go to the supermarket for three, four days or more. In this case the cash can only be used for small unexpected needs. However, if you depend, for example, on medications that are purchased periodically, it may be useful to keep enough money aside to cover these purchases over the course of a week.
The amount of cash you should keep at home also depends on other factors. A key factor is family size.
If you have a family with five children, the value of food expenditure for even a few days is much higher than if you live alone.
On a more general level, the question “How much cash is it good to have at home?” pushes us to ask ourselves how much money do we need to be able to “keep calm” for a few days in a situation where it is not possible to use with other payment methods.
Tips for keeping money at home
Cash must be preserved with carejust like other valuable objects in the house.
In fact, keeping cash at home always involves problems risks. This is why it is highly inadvisable to keep large amounts of cash at home, but only the amount of cash needed for the type of expenses mentioned previously.
Where to keep cash at home depends on everyone’s situation. It goes without saying that money should not be kept in a visible place and guests should not be told where it is stored.
Although cash should be stored carefully, it is not recommended to hide them between walls or under the floor. The risk is that they will then, after a long time, be forgotten. Furthermore, money hidden in property structures may be at risk of being destroyed, for example, in the event of fire or water damage.
When it comes to storing money at home, it helps the denominations of the banknotes are small, so you can use them more easily. The problem with large denomination notes is that shops may not have enough money to give us change.
In addition to banknotes, it is advisable to also keep coins at home. In exceptional situations, they facilitate the payment of small everyday purchases.
To protect yourself from possible interruptions to banking services – as happened a few weeks ago to Banca Sella customers – it is also advisable to have a bank account and a payment card in two different banks. If there is an interruption in the services of one bank, the saver will be able to manage their payments through the other bank, and vice versa.
