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Increasing numbers of Americans are growing wary of the global financial system. Declines in the stock, housing and job markets have caused many to reconsider where they keep their money.
“Because of these concerns, stashing cash in the home is becoming a growing trend in the United States,” said Adrie Roberts, Utah State University Extension family and consumer sciences agent for Cache County.
Cash stashing is crossing generational lines as the economy crumbles, she said. There are many who wish they had stuffed their savings under the mattress so they would not have lost thousands of dollars in the stock market and other investments.
Roberts said it is important to remember that money held in U.S. banks and credit unions in most basic savings accounts is insured by the Federal Deposit Insurance Corporation for up to $250,000 per account. Money stashed at home is not insured by the government ? and not even by homeowners insurance. Money stashed at home also runs the risk of being stolen.
In spite of these concerns, Roberts noted that money experts recommend having an emergency cash stash at home in case there is a need to evacuate, when banks are closed or there is a power failure and ATMs won’t work.
“Experts recommend that you start with at least a few hundred dollars and add to it each month,” she said. “Income tax refund time is the perfect time to start an emergency cash stash. Smaller bills and rolled coins are recommended in case it becomes difficult to make change in an emergency. Budget a small amount each month to add to your cash stash.”
As far as hiding places, Roberts said if safes or fireproof boxes are used, they should be bolted down so they can’t be easily removed. However, these are obvious first places a burglar would look. Consider these less obvious, lower cost hiding places.
Hide the money in an empty VHS tape box. (Make sure to remember which one.) Put the box on the shelf with the other videos. Most burglars will steal DVDs rather than videos.
Put cash in envelopes. Tape an envelope to the back of a wall decoration, the bottom of a toy box, the inside of a Christmas decoration box or to the bottom of a kitchen shelf.
Almost any container or package can be used for hiding. There are a number of decoy or diversion safes on the market that look like common household items such as fire extinguishers, dictionaries, deodorant containers, paint buckets, cans of potato chips, smoke detectors, peanut butter jars, flower pots and lamps. Many of these can be purchased online by searching for “decoy safes.” Many of these safes can also be made at home.
Hiding a cash container at a higher or lower-than-normal line of sight will increase the chances of it being overlooked by a thief. A location requiring a ladder or stepladder will be a helpful deterrent.
“Make sure at least one other person knows where your hiding places are located,” said Roberts. “If something happens to you and nobody knows where your stash is, it’s unlikely that it will be found. Worse, it could be accidentally thrown away. By far, the worst hiding places are closets, dresser drawers, night tables, under a mattress, inside old clothes, under carpets, couches or in jewelry boxes. These are the first points of interest for a burglar.”
Having an emergency cash stash is an important part of an overall financial plan, Roberts concluded. Having cash stashed in a safe, well-hidden location will be invaluable in the event of an emergency.
By: Julene Reese - Jul. 7, 2009
FAQs
While the size of your emergency fund will vary depending on your lifestyle, monthly costs, income, and dependents, the rule of thumb is to put away at least three to six months' worth of expenses.
Where can I stash emergency cash? ›
The best places to put your emergency savings
- Online savings account or money market deposit account. ...
- Bank or credit union savings account. ...
- Money market mutual fund. ...
- Checking account. ...
- Certificate of deposit. ...
- The stock market. ...
- Savings bonds. ...
- At home.
Multiply that daily amount by the number of days you want to plan for. For example, if you estimate $30 would be the minimum amount of money you would need, and you think five days is the right amount to plan for, you would have a comfortable baseline of $150 for your emergency preparedness reserve.
How much cash do you need stashed if a national emergency happens? ›
Two-thousand dollars should cover those costs. “The rule of thumb I advise my clients is to keep $1,000 to $2,000 in cash in case banking operations are shut down due to a national emergency or catastrophe,” said Gregory Brinkman, president of Brinkman Financial in Tulsa, Oklahoma.
How much cash can you keep at home legally in the US? ›
The government has no regulations on the amount of money you can legally keep in your house or even the amount of money you can legally own overall. Just, the problem with keeping so much money in one place (likely in the form of cash) — it's very vulnerable to being lost.
What is the rule of thumb for emergency cash? ›
The long answer: The right amount for you depends on your financial circ*mstances, but a good rule of thumb is to have enough to cover three to six months' worth of living expenses. (You might need more if you freelance or work seasonally, for example, or if your job would be hard to replace.)
Where to hide money for an emergency? ›
Here are the Top 10 secret hiding places for money we've found:
- The Tank. There's plenty of room in the toilet's water tank for a jar or some other watertight container stuffed with cash or jewelry. ...
- The Freezer. ...
- The Pantry. ...
- The Bookshelves. ...
- Under the Floorboards. ...
- Old Suitcases. ...
- Closets. ...
- Bureaus.
In addition to keeping funds in a bank account, you should also keep between $100 and $300 cash in your wallet and about $1,000 in a safe at home for unexpected expenses. Everything starts with your budget. If you don't budget correctly, you don't know how much you need to keep in your bank account.
Is it smart to stash cash? ›
Before you start investing for longer-term goals, it's important to have an emergency fund with around three to six months' worth of expenses. Keeping these in a checking, savings, or MMA is best because these accounts are liquid.
Where is the safest place to keep cash at home? ›
Where to safely keep cash at home. Just like any other piece of paper, cash can get lost, wet or burned. Consider buying a fireproof and waterproof safe for your home. It's also useful for storing other valuables in your home such as jewelry and important personal documents.
“You should keep an amount of cash at home that you are comfortable with in case of emergency. This should be no more than a few hundred dollars, or whatever amount makes sense for your lifestyle and budget,” suggested Evan Tunis, president of Florida Healthcare Insurance.
How to store cash in a safe? ›
Even within a gun safe, many individuals who store cash will opt to place it in a waterproof container. SureSeal boxes offer a completely sealed container that is both water-proof and smoke-proof.
Where to store emergency cash? ›
Where to put your emergency fund
- High-yield savings account. A high-yield savings account is a popular choice for those looking to earn interest on the money they park in their emergency fund. ...
- Checking account. ...
- Money market account. ...
- CDs. ...
- Roth IRA.
A good rule of thumb is to keep as little cash at home as you think is necessary because cash loses value over time. “Money in circulation loses value over time [due to inflation],” Dailly said.
Should I keep cash on hand for emergencies? ›
While you're working, we recommend you set aside at least $1,000 for emergencies to start and then build up to an amount that can cover three to six months of expenses. When you've retired, consider a cash reserve that might help cover one to two years of spending needs.
Is a $5,000 emergency fund enough? ›
Saving $5,000 in an emergency fund can be enough for some people, but it is unlikely sufficient for a family. The amount you need in your emergency fund depends on your unique financial situation.
Is a $1,000 emergency fund enough? ›
The reason $1,000 probably isn't enough money saved for your emergency fund is that your monthly housing costs alone are likely well above $1,000. If you experience a significant life change, like job loss or a medical emergency, you don't want to be without a home because you can't make your rent or mortgage payments.
Is $10,000 enough for emergency savings? ›
When asked how much money they'd need to save for a financial emergency to avoid additional stress, 40% would feel comfortable having a modest amount — below $2,500 — set aside. 21% say they'd need at least $10,000 saved to feel secure.
Is $2,000 a good emergency fund? ›
If six months' worth of expenses seems like way too much to save in a short time period, start smaller. Make a goal of $1,000 or $2,000. Once you reach that, up the ante. You'll feel good about reaching a goal and watching your emergency fund continue to grow.
