Complex Numbers

Cache Is King

Today's financial advice is brought to you by Lifehacker. Lifehacker: You're Doing It Wrong.

    Here’s How Much Emergency Cash You Should Keep at Home  
Having some cash salted away in your home is a really useful thing.

Wait, wait... we're supposed to have cash that we haven't spent yet?

In many places, cash is no longer king. While you still can manage to live a cash-only lifestyle if you want to, few of us do.

Yeah... not really. Depending on what you mean by "lifestyle."

Some of us don’t even carry cash at all, relying on our phones and credit cards, tapping and swiping at stores and using apps like Venmo or Cash App for personal transactions that would once have involved passing a wad of crumpled bills to someone.

Beggar in the median the other day: "Can you help out?" Me: "No cash." Beggar: "I have Venmo."

Look, I'm not trying to rag on the legitimately homeless here, but these median beggars generally aren't.

Even when we talk about the necessity of an emergency fund, we’re talking about money in a bank account, not cash stuffed under a mattress.

If I were robbing a house, under the mattress is the first place I'd look. Followed by sock drawer. You should express some creativity in cash caching, like, say, the toilet tank. (Note: I do not keep cash in my toilet tank; this was just an example.)

Money in a bank will earn interest, be insured against robbery, and will be accessible in some way no matter where you are.

This comes up in my queue the day after a bank fails. In fairness, the depositors' money was insured and the FDIC did its job. Shareholders are boned, but that's the risk they take.

But cash can still be useful. And in an emergency, cash can even be necessary. That’s why you should definitely keep a modest amount of cash at home. But how much?

I've said this before and I'll say it again: Come the collapse of civilization, bitcoin will be worthless (well, more worthless). Gold will be worthless, because other than being shiny, it's useless in an apocalypse. Cash, though, will still have value, because they won't be making any more of it. But your best bet is to stash away coffee, chocolate, and cigarettes.

As for how much cash, well, to some, a modest amount is a million dollars. If you have that stashed away, please let me know. I'll check your toilet tank.

It’s true that in most day-to-day operations no longer require cash, so keeping a stack of bills in a home safe or hidden away somewhere might seem like a waste.

Just be aware that there's an opportunity cost involved.

When it comes to cash, it’s best to have enough to get you through a week or so of paying for fundamentals like gas for your car and generators, groceries, necessary prescriptions, and maybe a night or two of emergency housing like a hotel or motel room.

I wasn't aware that you could even use cash at a hotel.

Anyway, the article goes into specifics. I'm not actually snarking on the idea; it's a good idea. It's just that, these days, for many people, the concept of "extra cash" might as well be "rainbow unicorn" or "pixie dust."