I went to the bank with a couple of checks today. One I cashed for walking-around money. The other I cashed and “hid” in my room for rainy-day funds. Is keeping money around my apartment like this a bad idea, or a good one?
It’s moderately bad:
(1) There’s a danger that it will be stolen;
(2) If you keep it long-term it loses value with inflation;
(3) If you invest it, you can get interest/dividends.
But this probably doesn’t matter all that much with $100 or $200. Just don’t do it with something like $10,000, OK?
It depends-- how many people have keys to your apartment? 
I doubt anyone can say whether it’s a good idea or a safe idea. I tend to look at it from the opposite direction-- I try not to keep in cash a dollar more than I can afford to lose or have stolen from me. A couple of hundred bucks is okay, but keeping thousands in a box somewhere in my house isn’t such a great idea. Even discounting the possibility of theft, there are always things like fires, water damage, etc. to concern yourself with.
It’s 2010. Banks are good places to keep money. You lose an ATM card, you can get a new one; you lose a wad of $500, you’re stuck earning another $500.
I wouldn’t advise keeping ALL of your money in cash, but there’s nothing crazy about stashing a bit of cash for a rainy day.
Personally I have my paychecks direct deposited into a checking account with an automatic transfer set up to move $100 of every check into a savings account, and I have $500 in hundred dollar bills secured at home just in case of… whatever.
Whatever you do, don’t hide it in Green Lantern’s ass. Everybody knows about that spot.
In brightest day, in darkest night,
no evil shall escape …Green Lantern’s ass
Money in banks is pretty safe. I know more about this than I’d like to, since I recently went through dealing with some piece of human garbage stealing more than $2000 out of one of our bank accounts. The bank did eventually credit us the money. That wouldn’t have happened if we’d lost cash.
In 1999, some (probably different) piece of human garbage stole my purse, with about $60 in cash. I was a grad student then, and that was a lot of money. I never had any hope of getting that money back after it got stolen. Ever since then, I try not to have large amounts of cash on me, because of what happened when my purse got stolen.
The problem with dealing exclusively with banks is that you are SOL if there is a disaster. You shouls always have enough cash on hand to deal with emergencies. I keep a stash of twenties in the safe at home, and another stash secreted about the truck. If the system goes down, I can still get gas, food, etc.
This assumes that wherever you keep your cash gets through the disaster relatively unscathed and accessible. That’s not the case for all possible disasters. It might not be the case in an earthquake. If you keep your cash on you at all times (such as in a purse or wallet, or in your car), you increase the chances that it will be stolen.
IME, this is not the reason some people keep cash around. It’s usually for emergencies. Believe it or not, there are times that vendors will not take a check or a credit card. For example, on Christmas Day, I put my car in the ditch out in the countryside in Iowa on my way to my parents’ house. I had to pay for the tow and the ride back to town with cash, so I was glad to have a large amount on me.
I consider it well worth the risk of possibly losing $500 to have that kind of security. I’ve used my emergency fund a few times now, but it’s never been stolen. If I lose $500, big deal. I’m not rich, but it’s not going to break the bank either.
And if I get eaten by a dinosaur…?
You plan the best you can for things, and after that hope that Fate doesn’t get too sticky. 
A couple hundred bucks is smart to have around in cash, IMHO. Strictly for emergencies. For example, when I’m out of town and my mom comes by to feed my cats, I tell her where I keep a hundred bucks just in case there’s a vet emergency.
One time, many years ago, I had some checks stolen from me.
I neglected to shred them and since the account was closed, I never thought about them.
A few years later, a book of these checks reappeared in the hands of a criminal who forged my name and used them to pay for pizza deliveries.
The restaurant involved took out a warrant for my arrest.
On a sunny Sunday afternoon in February, the Clarke County sheriff’s department sent a cruiser to pick me up from my home. I was handcuffed and booked for passing bad checks.
The bail was set at a few thousand dollars and if my wife had not had access to the appropriate funds, I would have stayed overnight in Athens/ Clarke jail which was not a pleasant prospect.
So, I recommend having enough money to bail you out in case of a similar incident.
If you’re going to hide emergency cash in your house, make sure you take it out and look at it occasionally, or at least write down its location somewhere. There’s about $200 in one of the hundred or so boxes in my attic, but damned if I can find it.
I keep some emergency cash hidden in the house, and have already needed to use it on two occasions. And yes, I replaced it as soon as possible.
I have tried, but if I don’t forget about it, it will get spent.
I can save if I put it in a bank and forget about it, but I have the ‘burn a hole in my pocket’ problem with cash.
Even change- my money begs to be free…
I try to give all my money to my significant other unless I have planned to spend it- and she won’t take it either, but she will let me put it in her bank account…
My family has a cash box from when my mom ran a business. We keep about $200 around, not just emergencies, but as pizza money, whatever. I’ve borrowed some to cover an overdraft (which I suppose counts as an emergency) and make change when I was selling something. I know my mom keeps some cash in her car, as well as a ton of change. The change is to pay for parking. The cash is if for true emergencies.
I think keeping cash in your car makes sense, because you’re more likely to need it than at home where you could just run to a bank or whatever.
I keep a couple of hundreds in my wallet for emergencies, but I’m wondering if I should change to fifties. I haven’t had problems using them when I needed to, but I wonder if sometime I might. I’m afraid if I had twenties I’d spend them. I don’t break the hundreds.
Absolutely. I always keep cash in the house for emergencies. After Hurricane Charlie in 2004, many places were only accepting cash. I loaned a lot of cash to a lot of family members those first couple of days after the storm. Seems foolish to count on that little plastic card always being welcome.
An earthquake is a lot more likely to knock out electricity (and thus access to ATMs) than it is to destroy a stash of cash.
For weeks after Katrina, I was on a daily conference call focused on 1) making sure all my company’s employees in the area were safe and able to deal with their homes and families; and 2) getting those same employees (and others) to help our clients in the area recover from the damage and keep their properties operating. For the first several days the main issue was money: everyone needed to buy stuff and no one had access to capital via ATMs or credit cards. We had to wire tens of thousands of dollars to Baton Rouge, get someone to drive the cash down to NOLA and hand it out to employees so they could buy gas, food, building materials, etc.