Despite the pandemic, your money is still better in the bank. Sure, it takes more effort to go there and make transactions, but it makes more sense than stuffing a cookie jar with $100 bills. Below are compelling reasons why it is a bad idea to keep your cash at home.
- You could lose the money.
Theft, fire, or simply forgetting where you hid your money can take it away from you just like that. This becomes more critical if you live in an area that is prone to natural disaster or crime. It is enough to keep enough cash to cover a week’s worth of living expenses. Leave the rest on the bank!
- Inflation gets you.
In a bank, your money can earn interest. Outside, it is hit harder by inflation and you are losing buying power faster. You would not be able to buy as much as you could if you just hide your money. Placing your cash in a savings account is more effective in counteracting inflation.
- No interest.
As mentioned, dollars kept in the bank earn interest. This enables it to grow. If you just hid your money at home, you are missing out on interest, which is basically free money. Competitive banks pay up to 1.75% on savings accounts and this adds up!
- No insurance.
When you deposit money at a bank that is backed by the Federal Deposit Insurance Corp., your money is insured by the FDIC. Can your piggy bank offer that? Even if you have homeowners or renters insurance, do not be complacent. In fact, these policies offer little protection for cash hidden around the house. You will only get a small amount of what was destroyed or stolen.
- It is a problem if you unexpectedly die.
Your family and friends sure have enough to worry about if you die unexpectedly. Is it really worth adding a treasure hunt to their current grief and stress? The simplest thing to do is keep your cash in a bank and the financial problem is over.