The Risks of Hiding Cash at Home
Hey there! So, you’ve probably heard the advice about having a little cash at home for those pesky emergencies, right? But you might want to think twice about how you’re stashing that cash. A recent survey from the financial management app Piere showed that a lot of folks have some interesting hiding spots—about 10% store their cash in a safe, but that’s just the tip of the iceberg!
Where Are People Stashing Their Cash?
Here’s where it gets a bit wild:
- 6% keep it in secret compartments, like drawers with fake sides.
- 6% have cash tucked under or in their beds.
- 5% have it chilling in the freezer or fridge.
- 4% hide it in ornaments or vases.
- 3% have cash under floorboards or carpets.
Experts are sounding alarms, though! Keeping too much cash at home can expose you to some serious risks.
What You Need to Know About Cash Risks
First off, your home insurance might not even cover all that cash you’re hoarding. Most policies cap cash coverage at around $200—yikes! So, if a fire takes out your secret stash, getting reimbursed might be a real headache. Plus, money just sitting at home isn’t working for you like it could in a bank, where it could earn interest or provide you with better financial security.
Certified financial planner Lee Baker emphasizes, “If your cash is at home and something happens, you may only have whatever’s listed on your policy.” Not ideal, right?
Smart Ways to Store Your Cash
Now, before you completely ditch your stash, it’s smart to have some cash on hand. But let’s talk about better places to keep it!
1. High-Yield Savings Accounts
Instead of stashing cash in your mattress, consider a high-yield savings account. They’re currently offering about 4.20% APY, compared to the measly 0.6% you’ll find in regular savings accounts. That’s money left on the table if you just let cash sit at home!
2. Investment Accounts
For those of you looking to grow your savings for the long haul, think about investing. Sure, the stock market can be a bit bumpy, but over time, it usually outpaces inflation, making your money actually work for you.
3. Create a ‘Personal Financial Bag’
For quick access in emergencies, why not keep a “personal financial bag” at home with just enough cash to get through a tough day or two? Toss it in a fireproof safe so you’re still covered in case something goes awry. Plus, let those living with you know exactly where it is—keeping it simple is key during a stressful situation.
So, rather than relying on random hiding spots, consider these options for a safer and smarter way to handle your cash. Your future self will thank you!
