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Your Take: Why I Keep Cash at Home

Tell a few personal finance bloggers that you keep cash in your house and you will invariably be asked why. Why keep cash in your account when you can put it into a high yield savings account [3] and earn a percent of interest? What if there is a fire? What if you get robbed? Why not put it in the warm embrace of FDIC insurance [4] at th ebank?

I don’t keep much, usually only one or two hundred dollars, and the reason I do so is so I can get cash easily if I need it, whatever the reason. I don’t keep a lot, I don’t see the point given credit cards, but I do want to keep a little for those times when cash is king and credit can’t be accessed. I’m talking about those rare cases, like a black out or a big snowstorm (like the major snowstorm [5] a few years ago in the Baltimore Washington metropolitan area), where you need some cash but just can’t get to a bank.

To be perfectly honest, the number one reason I do this is because I’m lazy. I don’t really think that there will be a calamity where I won’t be able to get to an ATM or use a credit card, but sometimes I’m going out somewhere and I need cash but don’t want to make a trip to the ATM. It’s nice to have a few bills at home so that I can tap that reserve instead of make that trip. That’s why I keep some money stored away at home, instead of earning a few pennies at the bank.

One final bit of warning, cash is usually not completely insured by your homeowners or renter’s insurance. So if you are robbed and they take cash, or there is a fire and the money burns, you may be limited in how much cash is covered – that amount will be listed in your policy. I don’t recommend keeping thousands of dollars at home, but a few hundred will probably be covered by your policy.

Do you keep cash at home? If so, why?

(Photo: amagill [6])