In today’s society where nearly all forms of payment have been converted to plastic, it is hard to convince people to carry cash. Mostly citing security concerns or convenience issues, people just aren’t into carrying cash these days. However, there are still several good reasons to carry cash, and occasions when only cash will do. For these scenarios, just how much cash should we have on hand?
Walking Around Money ($20)
I try to keep at least twenty dollars on my person at all times. Twenty dollars is enough to cover tips, or small purchases from a vendor who does not accept credit cards. A small amount of cash may also be needed for gas or food purchases in a pinch should your debit or credit cards decide to not work. After my “soggy hotdog” experience, I’ve made it a point to try and leave an extra $20 bill tucked away in the back of my wallet.
Travel Money ($250)
For regional travel, a couple hundred dollars seems like a prudent amount of cash to keep handy. While traveling there will be more opportunities to engage in cash-only transactions, such as cab fares, tips for hotel staff, and picking up the latest copy of Kiplinger’s Personal Finance from a magaine stand. I like to separate my travel “walking around money” from my total travel cash by leaving $100 or so tucked away in my suitcase, or similar hiding place and replenish as needed.
In the event my wallet (along with debt/credit cards) is lost or stolen, I am not completely without money for meals, gas, etc.
Cash Kept at Home ($500)
Along with a fully-funded emergency fund, and a smaller local emergency fund, it also makes sense to keep some cash around the house. Home safes and lock boxes are fairly inexpensive and can provide security for your cash and other valuables that you don’t want to leave in a safe deposit box. In the event of a disaster (natural, or otherwise) it would be good to have a few hundred dollars in cash at your disposal.
You never know when access to your money at the bank could become inaccessible, or roads impassible, so keep a small amount handy in the event of a large scale emergency.