It’s great to have the convenience of credit and debit cards. In the past, we’ve advocated the use of both, so long as one always pays the balance and is aware of the fees, respectively. But while we’re all for racking up points for that trip to Hawaii, Gail Vaz-Oxlade makes a valid point about the increasing cashlessness of our world – it’s annoying. Just because you don’t use cash doesn’t mean you shouldn’t carry some of it. Who among us hasn’t waited in line for a coffee only to be told the place is cash only? Who among us hasn’t had a Girl Guide come to the door, hoping to unload some cookies, only to realize we haven’t any cash? While it’s true that you shouldn’t keep your life savings under your mattress, it’s also true that keeping a bit of cash on hand is important.
Financial planners often advocate having an emergency fund, or three months of savings in the bank. But just as you want protection from unexpected unemployment or loss of income, you always want a petty cash emergency fund. How much depends on what kind of needs you anticipate in an emergency, but having cash to run the gamut from milk run to unexpected trip to the hospital is necessary.
Some things to think about:
• Keeping extra money in handbags for unexpected emergency groceries.
• Keep a small stash of a few hundred dollars somewhere hidden but instantly accessible for a more severe emergency.
• Don’t put all your money in one place, but do keep it in few enough places that you can remember them all.
• “Keep as much money in your home as you think you’ll need — not too much that you can’t afford to lose, but enough to sustain you through several days to several weeks of cash-only situations.”
• Don’t hide the cash under your mattress.
• If you remove the cash for a discretionary emergency, make sure to replace it right away.