Experts advise carrying that amount of cash these days
America is loosening its grip on its age-old love affair with money.
Whether it’s having a handful of cash when you walk into a restaurant or casino, or simply having coins jingling in your pocket at the hardware store, old consumer payment methods are giving way to news – and at an accelerated pace.
Consider a recent Pew Research Center survey showing that 41% of Americans say nothing of their purchases in a typical week are paid for in cash. This represents an increase from 29% in 2018 and 24% in 2015.
Conversely, the proportion of Americans who report that all or almost all of their purchases are paid for in cash in a typical week has steadily declined from 24% in 2015 to 18% in 2018. to 14% today,” the report said. “Yet about six in ten Americans (59%) say that in a typical week, at least some of their purchases are paid for in cash.”
Is cash on the way out?
Most Americans always like to have cash when they go out.
The Pew survey found that around 58% of Americans like to have cash with them in public, compared to 42% of consumers who don’t care whether they have cash or not when shopping. purchase.
Admittedly, Hurricane Ian highlights the fragility of electronic payments in the event of a natural disaster.
“When the electricity is out and the computers are not working, we still need money to do business, whether it’s to buy basic necessities or to buy gasoline for a generator or to travel at work,” said Gerard Filitti, senior counsel for the Lawfare Project. “It should also be remembered that not all disasters are natural; wars and instances of domestic instability show the need for cash (preferably denominated in US dollars) as an essential survival asset.
Other payment experts point to the darker shadows of the US economy, especially financial fraud. In these scenarios, cash is king over digital payments.
“One of the fastest growing crimes in America is identity theft,” said Oak View Law Group CPA Levon Galstyan, CPA. “It’s strongly linked to the increase in the use of electronic payment methods and online storage of financial information.”
The best defense against identity theft in some financial transactions, perhaps even with some businesses, is to pay cash, Galstyan noted.
“The advantage of using cash is that there are no paper trails,” he said. “Cash greatly eliminates the potential for identity theft because no information is left with the seller or merchant, although it may reduce the chances of recovering a faulty or substandard good or service.”
Cash also protects consumers who are concerned about transactions in a world where consumers are increasingly monitored (and audited) for their daily spending.
“Whether it’s a personal indulgence that one wishes to keep secret or a medical procedure that some states (but not all) prohibit, there is a certain level of comfort in being able to experience at least some of your life in relative privacy,” Filetti says.
How much cash should you carry?
As the digital payment industry makes big inroads over cash for commerce, US consumers who enjoy filling a wallet or wallet with cash may be wondering how much cash is actually needed. carry these days.
After all, you never know when a merchant might want cash over digital payments.
On a daily basis, $20 is a good number for small “expenses” like picking up at a garage sale, as well as tips after 18 holes of golf or after getting your nails done. Depending on your lifestyle, aim for what you really need – say, $100 or more in cash if you tend to have a higher income and spend more money.
“I always make sure my wife and I have $100 in cash at all times,” said Jay Zigmont, founder of Childfree Wealth. “It may be old-fashioned, but having cash can help you in an emergency and can give you bargaining power.”
For example, a storm destroyed credit card machines at the local gas station, but they were still selling gas for cash, Zigmont said. “Having cash meant we could get gas for our cars and our generator, while others couldn’t,” he told TheStreet.
It’s not just about having cash on hand. Having a few bills at home also makes sense.
“It’s safest to carry between $100 and $300 in cash in your wallet,” Galstyan said. “But also keep a backup of around $1,000 in your house. A few hundred dollars may or may not be enough to cover your daily expenses, depending on your spending habits. Therefore, have between $1,000 and $2,000 in cash if banking services are suspended due to a sudden incident such as a disaster or national emergency.
Cash Not yet for the account
Historically, cash works best at a yard sale or on a big city street, like getting a hot dog from a vendor.
“Part of that is because a cash transaction provides some assurance that your day-to-day life won’t be disrupted if your card number or bank account is compromised,” Filitti said.
In this regard, cash is far from dead.
“Whether it’s a few hundred dollars in a wallet reserved for incidentals or a few thousand dollars locked away in a safe for a real emergency, it’s always important to have cash on hand. “, noted Filitti.