How Much Cash Should You Keep at Home?

Q: How much cash does the average person keep on them?

The amount of cash someone has on hand varies from one individual to another. Some experts recommend having easy access to $100-$500, though this doesn’t have to be in your wallet.

Q: Is $10,000 enough for emergency savings?

It’s smart to have three to six months’ worth of expenses in an emergency savings account. For some, $10,000 should be more than adequate for most emergencies. Of course, this number will vary based on your living expenses and how many people you’re supporting.

Q: How much liquid cash should I keep?

The amount of liquid cash you should keep on hand will depend on you and your personal situation. If you’d like to have cash at home in case of an emergency, $200-$500 should be enough for one person, while $1,000 may be more appropriate for a family.

Susan GuilloryUpdated July 13, 2023

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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.

While the amount of cash you keep at home is ultimately up to you, it’s recommended that a single person living alone keep a few hundred dollars in cash at home in case of an emergency. If you have a family, this number increases to about $1,000.

Why Keep Cash at Home?

You can buy just about anything with a debit or credit card, or use a payment app on your phone for purchases, but technology isn’t always reliable. Having some cash at home for an emergency fund can be a good idea. Should there be, for example, a hurricane or natural disaster that makes it impossible for stores to operate their card payment systems, having cash to pay for purchases would be one less thing you’d have to worry about.Before we talk about how to keep cash safe at home, let’s weigh the benefits and risks of keeping your money in your home.

Benefits of Keeping Cash at Home

While it’s not a good idea to keep large amounts of cash at home, there are some benefits to keeping some cash at home to consider.

You Don’t Need to Pay Bank Fees

Common fees associated with bank accounts include maintenance fees, ATM fees, paper statement fees, inactivity fees, and more. By keeping your cash in your home, you will avoid paying any fees the bank may charge.Keep in mind, though, that keeping the bulk of your money in a bank is considered safe. You also can put it in a high-yield savings account to earn interest on your money.

You’ll Be Ready for an Emergency

In the event of an emergency or natural disaster, cash can come in handy if you can't use a card or your phone to make a payment. It’s a good idea to have enough cash on hand to cover daily expenses for your family, if needed. While the amount may vary, having cash available to get you through a week or two is not a bad idea.

You May Need Cash for Daily Expenses

You may need cash to tip a delivery driver, lend a friend some money, or contribute to a neighborhood event. If you have kids, having cash at home may be necessary. They may need money for lunch at school one day, a field trip, a present for their teacher, and more. And, if the ice cream truck drives by one afternoon, your kids will appreciate you having cash on hand!

It Can Help With Budgeting

Going on an all-cash budget can help you keep better track of your expenses and stay out of credit card debt. It’s very easy to swipe a credit or debit card, but letting go of cash is a bit harder mentally, really making you think about your purchases. If you’re trying to get out of or stay out of debt, try using a cash-based budgeting system for a few weeks to see if it helps you save.Recommended: 15 Budgeting Tips for Beginners

The Risks of Keeping Cash at Home

Just like anything, while there are benefits to keeping cash at home, there are also risks.

It’s Not Guaranteed to Be Safe

You may feel like your home is safer than a bank, but that is not necessarily the case. You run the risk of being robbed, and unlike with a bank, your money may not be insured. If your home is insured, you’ll have to file a claim for the stolen money and wait for that claim to be reviewed and processed before you receive a reimbursement. And there is no guarantee your claim will be approved.

It Isn’t Earning Interest

Another reason to hesitate keeping too much cash at home is that if it’s under your mattress (or in a safe), it isn’t earning interest the way it would in a savings account with compound interest. Essentially, money in the bank works for you, and your money earns interest while you sleep. While it’s convenient to have some cash at home, it’s not always a smart financial decision for large amounts of money.

Cash Isn’t Accepted Everywhere

In our post-pandemic world, more businesses are accepting cards only and won’t take cash. So keeping all your cash on hand may not do you any good if you can’t actually spend it.

It’s at Risk of Being Damaged

If your house caught on fire, your money would go up in smoke. And if you live in a humid area, it can also rot. Paper is fallible, and you take a risk by storing it too long.

How Much Cash to Keep at Home

If you do decide to keep cash at home, keep as much as you think you would need for an emergency and small, daily expenses that may arise. If you are single, you might keep $200-$500, whereas if you have a large family, you might keep $1,000 or more at home. Remember, if you have savings goals, your money won’t earn interest at home, so put the rest in a savings account.

Safest Place to Keep Cash at Home

While it may be tempting to put your money under your mattress, that’s certainly not the safest place to keep cash at home. Instead, invest in a safe. A safe will not only protect your money from theft, but also from fire or flood damage.A safe that can be bolted to the ground is typically the safest, but any safe will work. And keep your code in a safe place (not taped to the door).

Alternatives to Keeping Cash at Home

While it’s fine to keep some cash at home, if you’re concerned about meeting your savings goals, look into opening a high-yield savings account. Having a savings plan can help you set aside money for important goals like a down payment on a house, an emergency fund, or a vacation.Though a savings account is a good idea, realize that you may be limited to how many withdrawals per month you can make. If you plan on taking money out regularly, also open a checking account, as there won’t be the same restrictions on transactions.You may also consider having a prepaid card if you want to keep money somewhere other than your primary bank account.

The Takeaway

When it comes to how much cash you should keep at home, the answer will vary depending on your needs and what you consider an appropriate amount to cover an emergency. While having some cash on hand is helpful, also consider opening a savings account.Explore high-yield savings accounts with Lantern by SoFi.

Frequently Asked Questions

How much cash does the average person keep on them?

Is $10,000 enough for emergency savings?

How much liquid cash should I keep?

Photo credit: iStock/Liudmila Chernetska

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About the Author

Susan Guillory

Su Guillory is a freelance business writer and expat coach. She’s written several business books and has been published on sites including Forbes, AllBusiness, and SoFi. She writes about business and personal credit, financial strategies, loans, and credit cards.

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