Cash is king. Or is it? Most folks would agree that having at least some emergency cash at home is a good idea. But simply sticking some spare $20s in the freezer probably isn’t your best bet. In fact, when it comes to storing cash at home, there are a variety of considerations you should take into account — not the least of which is how much cash you should keep at home and where to store it.
The following takes a look at these questions and more.
Why Keep Cash at Home?
There are two primary reasons to consider keeping (at least some) cash at home.
1. Natural Disasters
The first is natural disasters. As a precautionary measure for times when credit cards may not be accepted and/or ATMs may not be accessible, having cash on hand can give you a layer of protection.
2. A Lack of Trust in Financial Institutions
The second reason is, not everyone trusts financial institutions. The recent bank crash in Silicon Valley is a prime example of the peril individuals and businesses can face when the financial institution that houses all their money becomes unstable or fails.
How Much Cash Should You Keep at Home?
At a bare minimum, financial experts recommend you have at least a day’s worth of expenses on hand. How much a day’s worth of expenses is can vary from person to person — and household to household. For added security, many individuals prefer to have a week’s worth of expenses in cash.
In the event of a natural disaster, bank closure or catastrophic event, this extra cash offers you more options to care for you and your loved ones.
What Are the Risks of Storing Cash at Home?
Cash in the mattress (or the walls or the safe or buried in the backyard) was certainly an attractive idea following the Great Depression. Unfortunately, there are certain drawbacks to storing money personally:
Stolen or Destroyed Cash Is Hard to Recover
According to the FBI’s 2019 Crime in the United States report, just 2.6% of the $1,432,559,757 in stolen currency was recovered. And what about recovering this stolen cash through insurance policies?
Unfortunately, even those who are properly insured may find themselves feeling more than slightly frustrated by how much of their stolen cash isn’t covered. A typical homeowner’s policy covers between $200 and $2,000 in cash lost in a fire, theft or other peril.
Generally speaking, bank accounts offer a higher level of protection against theft — especially those that are backed by the federal government. In the event that your money is stolen through unauthorized transactions, you are often only liable for part of the stolen funds (if any), assuming you report the fraudulent activity immediately.
Cash at Home Doesn’t Earn Interest
The interest rates on checking accounts aren’t going to turn pennies into a pot of gold, but they’re definitely better than a poke in the eye. Cash that’s stored in your home or wallet just sits there. And on a more practical level, it becomes less valuable as inflation continues to rise.
Cash Can Deteriorate & Be Damaged
While paper doesn’t break down as quickly as perishable items, it is susceptible to deterioration. Cash is stronger than printer paper, but bills can still mold, rot and rip. Those who live in an area prone to flooding or that has a high level of humidity are at a bigger risk of their cash being damaged.
What is the Best Way to Store Cash at Home?
The quick and dirty answer about the best way to store cash at home is that you want to:
- Keep it Secure
- Keep it Hidden
- Keep it Dry
That being said, the following detailed tips are worthwhile considerations for those who want to best protect their at-home cash stash:
1. Select a Secure Location
Security is one of the first things you want to consider when selecting a place to store your cash. The four most common secure locations are:
Each of these options ranges in levels of security, with fire resistance and burglary resistance increasing as the price increases. We recommend considering the value of what you’re storing and always buying a safe that represents that value.
2. Use Tamper-Evident Bags
When storing your cash, it’s a good idea to use tamper-evident bags. Available in a variety of sizes, they allow you to see if someone has tampered with your cash. Place the money inside the bag, seal the bag, and then write the amount on the outside.
This has the added benefit of helping you keep track of how much cash you have on hand.
3. Be Discreet with Your Storage
Discretion is the better part of security. The likelihood of someone stealing your cash or valuables drops drastically if they don’t know you even have it. While there are a host of gun safes that may be a stunning addition to your home’s decor, installing a safe in a hidden location can help reduce the chance that a burglar will even attempt to access it.
4. Place Cash in a Liberty Cool Pocket
In addition to burglary, fire is one of the biggest threats to storing cash at home. Even with good homeowners insurance, only a small portion of currency is even covered in the event of a house fire — which means your hard-earned savings could go up in smoke (literally).
Liberty Cool Pockets can help reduce the air temperature around the contents stored within them by as much as 50 degrees. This additional layer of protection can give firefighters a better chance at extinguishing the burn before your cash is gone.
5. Use a Dehumidifier
Next to fire, moisture is another concern for those storing large sums of cash. Exposure to moisture can cause paper currency to mold and rot over time, effectively ruining it.
6. Place Cash in a Waterproof Container
General moisture buildup in a safe is a concern, especially if you live in a humid environment. But exposure to a large amount of water, such as during a flood or burst pipe, can also damage paper currency.
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.
BONUS TIP: Store Cash at the Bottom of the Safe
Heat rises. In the event that there is a fire, the hottest part of your safe will be the top shelves. Always store cash (and other valuables) at the lowest possible location within your safe.