How Much Cash to Keep at Home

Keeping a stash of cash at home can provide a financial lifeline in an emergency if banks, ATMs or other financial institutions go offline. But how much cash should you keep at home to ensure you’re prepared without risking loss or theft? About $1,000 should be enough, but the amount varies depending on your household.

Most experts recommend keeping enough cash on hand to cover necessities for a few days. Here are more answers to the question of how much cash to keep at home.

Reasons to keep cash at home

Having cash at home creates a safety net if other payments temporarily don’t work. It also gives you a backup if you can’t access payment cards or mobile apps in emergency or unexpected situations.

These are good reasons to keep cash on hand:

• Payment systems may be disabled during power outages, natural disasters or cyberattacks.
• Access to ATMs could be limited during bank holidays.
• You could be without funds if you are waiting on a replacement card.
• If you overdraw your bank account or max out your credit cards, you can use your backup cash to purchase essentials.
• Some merchants, including event vendors or small businesses, only accept cash.

How much cash do you need on hand?

How much cash to keep at home depends on your location and household size as well as typical expenses. About $1,000 in cash is enough for most people, says Melanie Musson, insurance expert with Clearsurance, a platform for customer-generated reviews and ratings of insurance companies.

Consider how much you’d need to cover basic expenses such as food and fuel for three to five days. Large households should err on the side of keeping too much cash — and so should people in disaster-prone areas.

“If you live in an area where you frequently experience extreme weather or power outages that would affect your ability to access the money in your bank account, you might want to keep more,” says Jeff Ketelaars, co-founder of the Security Guards Only online community. “If you live in a neighborhood with frequent break-ins or don’t have a solid home security system, I’d suggest keeping a little less.”

You don’t make utility or mortgage payments in cash, so there’s no reason to stockpile funds for those bills, Musson says.

“You may need to buy groceries with cash, though,” she says. “Think about how cash would help you if credit cards were down for a while.”

What are the risks of keeping cash at home?

Keeping cash at home can be practical but risky. Yes, have some cash at home, but it shouldn’t replace deposit accounts or digital payments because of the security risks, Ketelaars says.

“The biggest risk is obviously the money being stolen, lost or damaged,” he says. “That’s why keeping a sensible amount of cash is important to prevent losing a large sum of money.”

Potential downsides to stashing large amounts of cash include:

• Theft: Cash is easy to steal and not tracked or backed by the Federal Deposit Insurance Corp. (FDIC) like money in a bank account. You could file an insurance claim, but that could raise your rates, and it could be tough to prove how much cash was taken. This means recovering it won’t be easy.
• Loss: Physical currency can be lost. You could accidentally throw away or misplace cash; fires or floods can destroy it.
• Interest opportunity cost: Cash at home doesn’t earn interest and loses value over time because of inflation. This is why you may want to put most of your money in a high-yield savings account (HYSA).
• Spending temptation: It’s easy to access and spend cash. If you’re prone to overspending, then holding cash might make it too easy to waste.

How to keep money safe at home

You can keep money safe at home by limiting how much you have and choosing the safest place to store it. For most people, the safest place to keep cash at home is in a fireproof safe with a combination that only trusted family members know.

“The key is to balance accessibility with safety, ensuring you have enough for urgent needs but not so much that it becomes a liability if it’s lost or stolen,” Ketelarrs says.

Spread out your cash in different secure spots instead of keeping it all in one place, he says. Also, avoid obvious hiding places, such as under a mattress, in the freezer or inside of a book.

Ways to safely store cash at home:

• Use a fireproof and waterproof safe to protect your cash from theft, fire and flooding.
• Diversify your hiding spots instead of keeping your cash in one place.
• Don’t use obvious locations, such as under your mattress.
• Only tell trusted family members where the cash is stored.
• Consider adding home security so you can use cameras and alarms to deter burglars.

Adds Musson: “Don’t talk about keeping cash at your house. You don’t want listening ears to get any ideas.”

Alternatives to keeping cash at home

Maintain access to various types of payments in addition to cold hard cash.

An HYSA or money market account can keep funds accessible and secure in an FDIC-insured account that earns interest.

You can also load emergency funds onto a prepaid debit card that you will store safely and use when needed. There are protections for prepaid debit cards, in case of an error or unauthorized transaction, as long as you report any suspicious activity immediately. Do know that there may be fees attached to a prepaid debit card.

You can also keep money in a digital wallet that allows you to pay for many items by using your phone rather than cash or cards.

Another option is keeping a dedicated credit card with a sufficient credit limit for emergencies.

Just keep in mind that these options are typically to be used in addition to storing a small amount of cash at home. The idea is to have access to money in case you cannot use your cards or digital payment systems for whatever reason.