I’m 19 and working towards becoming financially independent (I know I’m starting late, it’s a long story) and I’m wondering how much I need to keep as cash vs on my debit card? Should I keep some in my wallet and some at home? How much do you need on hand at any given time? Is it generally better to buy things with cash or debit? Is it worth depositing the cash I have now into the bank to use with my debit card or should I just spend it as cash over time? Any advice would be welcome, I’m very new to this world.
How much cash should I keep on hand?
byu/Bittersweet_Boii inpersonalfinance
Posted by Bittersweet_Boii
29 Comments
You don’t really need cash anymore, maybe $50 at the most in your wallet. Keep the rest in your bank account
You’re not starting late at 19 dude, that’s actually pretty early compared to most people lol
Keep like $20-40 in your wallet for emergencies and maybe $100-200 stashed at home. Most stuff you can just use your debit card for since it’s easier to track spending that way. Only real advantage of cash is some small places don’t take cards and you can’t overspend what’s physically in your wallet
Definitely deposit most of your cash into the bank so it’s actually secure and earning something instead of just sitting around
You shouldn’t need cash, debit is fine. Credit is best, but only if you’re responsible.
The only reason i still *need* to use cash is that I need to pay in cash to get quarters for laundry. Otherwise, you can pay for pretty much anything worthwhile with card.
That being said, you really want your everyday purchases to be on a credit card, not your bank debit card. You don;’t have to look very far on this sub to see why.
I haven’t touched a single piece of actual currency in several years.
I have $20 stashed in my car’s console in case I need it for some obscure reason.
If you have reliable ATMs, no need to keep cash. I have like $10 in my wallet. But that may be more if you do things and frequent places that may need cash.
Maybe a few tens at most for a cash only emergency. My advice, don’t buy stuff on debit either. Use a cash back CC or something with benefits, and then pay off the full balance every month. Can’t stress that enough.
The reason for this is that anyone swipes your card or there are fraudulent charges, you aren’t out of that money while the bank figures it out. The CC gives you that layer of security on top of benefits like cash, points, travel miles, etc. I keep my debit card locked in my bank’s app pretty much all the time so it can’t be used.
I keep $100 in 20’s in my wallet. Haven’t touched them in ages. Keep about $1000 in cash in a safe at home. Don’t really need to but I do it anyways. I pay for everything with my CC, although I do have a debit card. It rarely gets used.
There’s 20 in my wallet. That’s enough for a meal. There’s 200 in my car, I have made deals with tow drivers or random guys with trucks to get me out of a ditch. There’s 500 cash in the safe, because sometimes I find a good deal on stuff and wanna snag it.
The rest is at a bank and insured up to 250k.
You are definitely NOT starting late. I have clients that didn’t start until they were in their late 40s. THAT’S starting late.
There’s really no reason to keep more than $20 cash available.
Have you established a budget for yourself? That’s the first place to start. Once you have that, you’ll know what ‘extra’ you’ll have after expenses and you can deposit that into a savings account until you build up enough to start investing.
I have 5,000 in my safe that doesnt get touched. Reason being, I live in a hurricane prone state. No power means you cannot use cards. But you still need gas and water and food. Of course we also stock up on that stuff when season starts. But you never know.
If you have a similar situation, id suggest building something like that too. If not. Maybe the cost of a major repair for your car or home if thats the case.
Cash is still king. Maybe not for much longer, but its not a bad idea to have a decent amount stashed some where.
I have a stash, few hundred in potential use, at home. I carry zero cash with me in my everyday life.
If I am doing something outside of normal life? I take a couple of hundred with me. Outside of normal life is usually traveling (work or personal) or fairs/shows etc.
It’s not advisable to purchase anything with your debit card, because of fraud risk. If your debit card gets compromised, the fraudsters have direct access to your money, and it can take weeks or longer to resolve and reimburse you. Just use it for banking at ATMs.
Best advice is to get a credit card with no annual fee. Good chance your bank offers one. Use that for your day-to-day spending, bills, etc., and pay off the statement balance every month.
Beyond that, you won’t need to carry cash, unless you frequent any ‘cash-only’ businesses.
I typically don’t carry any cash, unless I go on vacation or to an event. Then I’ll carry maybe $100-200, in case a vendor doesn’t take card.
I would highly recommend only keeping maybe $20-$60 in your wallet and maybe 100 or $200 in cash at home in a hidden spot. You really only need the cash if you’re out and about and you need to pay for something and your card doesn’t work or they don’t accept credit cards.
And the money at home is really just in case you lose your wallet with your debit card or credit card. You still have cash to buy food until you can go to the bank and get a replacement. Even then, you can typically add cards to Google or Apple wallet and pay using tap to pay even if you don’t have your card.
I highly highly recommend putting your money into a checking account at your bank or local credit union whichever is more convenient. But you should try and apply for a credit card as soon as possible. You can get some with a cashback bonus if you spend a certain amount within the first few months. A lot of times it’s a very low amount that you have to spend and it’s spending you would already be doing. You’re not gonna be paying any interest as long as you pay off your monthly bill every month and you use it the same as a debit card.
I recommend this because you should always be using a credit card for transactions if it’s within your credit limit and you’re gonna be paying it off every month. This is because credit cards have much better fraud protection in case your card gets skimmed or your card is lost or your information is stolen. It’s much easier for the bank to erase the pending charges while they investigate for fraud, and you don’t have to pay any interest in the meantime. However, if your debit card is lost or stolen or the information is stolen and it’s used the bank has more time to investigate and they don’t always give you a temporary credit while they investigate so you can be in a lot of trouble if you keep all your money in a checking account and you have to wait 30+ days while they investigate.
You’re not starting late.
If anything, you’re starting early! Or rather, right on time.
It’s best to buy things with a credit card and pay it off in full every month.
Edit: get a secured credit card first or be an authorized user on one of your parents credit card. You pay it off from your checking account.
Cash as in paper money? I have one $20 bill in my wallet, and it’s been there for at least a couple years.
Places that are accepting credit cards are increasingly charging a surcharge. Check receipts. There may be a reason to keep a little extra cash for lunch and coffee purchases. Also people are getting into so much credit card debt that there is a case to be made about not using credit cards. I use them because I like to collect points but I paid off my balances every month. I also just don’t spend a lot so I can manage it. still it’s a slippery slope.
You have to hide, well at least twenty bucks gas money in your car, in case you’re ever stranded without wallet or phone. And at least 50$ in your wallet is a good idea too.
I keep $20 in small bills and $8 in quarters in my wallet for spending when I don’t want to use my cards. I keep a $100 bill hidden in my wallet for emergencies. My kid who is your age keeps $50 stashed in her phone case. I keep an emergency $2k cash stash in my house. I would fund my emergency stashes, then deposit my cash into my account.
I’d get a lock box for my extra cash and important documents at home. You can get ones with chains on them to secure them to furniture.
I’d get a savings account that is linked to your checking account. Any “not this pay period” money goes there. Once you get a grand or so there, get a high yield account for the extra. Interest on HYSA’s is much better.
If you have a job, start a Roth. My brokerage requires $2k to open one. You may be able to find a place that lets you start really small if you have auto transfers. My kids started out only contributing $50/month. I put up the $2k. I have Fidelity for my Medical IRA and it’s pretty cheap. IDK about their Roth’s though.
Get a credit card. You are looking for no annual fee. Put some small monthly bill on it – say your streaming – and set the credit card to pay in full each month. Toss it in your lock box and save for emergencies. You build credit this way for when you want to move out. One of my kids was the only one who could get internet without a deposit when he moved out because I had him as an authorized user on one of my cards.
We only use cards for large purchases. It’s too easy to spend money on them, and lose track of your spending.. On top of that, most places charge extra (3-4%) for cards.
I’d keep a week of day to day expenses in cash, and a few weeks for emergencies at home. We find that we spend a lot less by using cash.
Cards are good for bills that are regular where you can budget if they accept them with no surcharge.
I keep a handful of quarters for some parking meters. Don’t really need these anymore either because they now take credit cards.
You really have to decide that for yourself. I like to carry what most people would consider a ridiculous amount of cash. I rarely have less than $500 in my wallet, often $1K USD. Primarily because I might pop into the casino randomly, and I don’t want to pay ATM fees.
I also never know when a store somewhere might have a credit card system failure. Realistically, it’s VERY rare. However, I don’t worry about the risk of carrying cash. I’ve never been robbed, and if I was, I’d give it all up immediately. I make over $100K a year, and live a pretty simple life overall.
The financial risk of losing my wallet and a thousand dollars is not really a risk. Obviously I’d be pissed, but it’s not gonna change my month. It might change my weekend, but that’s all. Find a number that works for you, and don’t worry about it. I would say that your don’t want to carry an amount of cash that could hurt you if it all disappeared.
When I was 19(25 years ago), I had a negative net worth. No savings and all debt. At that point I regularly had all of my savings in my wallet. That was only a couple hundred bucks, though. I was young and didn’t have shit anyway, do I didn’t really have a choice. If you have a choice, be wiser (and more successful) than I was.
Insurance covers very little physical cash in the event of fire, robbery, etc.
Get a credit card, buy everything with it, just pay it off every month for sure. I pay mine weekly so I never carry a balance, you get one back for using it. Put your money in the bank. Unless ypu live somewhere that only accepts cash, holding cash is pointless. Maybe an emergency 100 or 200 in case you need to work something out in person on an emergency.
…. 19 is late?
I keep some cash hidden in my car for tips for valets and the drive-thru beverage place guy. I have about $100 in my wallet that rarely gets used. Maybe just at farmers markets or a Girl Scout cookie table sale somewhere. I use my credit card for everything I possibly can. I get great points on my Amazon VISA and it helps my credit score. I can keep track of spending too. I’m tracking my takeout spending and my grocery spending each month as well as total spent each month.
Anyone not keeping a few thousand in cash at home is foolish.
I’m happy to take my downvotes, loss of returns, and chance of theft as the cost of insurance against a low probability, high impact downside.
32M: I typically keep $100-$200 in cash. Other than that I keep a few thousand in a checking account for quick “big” purchases (which you technically don’t need if you have a Credit Card with a decent limit.
Then I have 6 months expenses in a HYSA for my emergency fund.
Most everything “extra” goes into the market. Sometimes I’ll build up my emergency fund more, just to drain it back down the my 6 months, depends how I’m feeling.
First…. your 19. Your not starting late. If you started working anywhere at 18. You have 50 years of working life before hitting a typical retirement age. And even then. Your not to old to do most jobs if you wanted to continue working. You have a VERY long road ahead of you.