How much cash do you have on hand, right now? Do you rely on electronic money for most or all of your transactions? You might want to reconsider that philosophy…
Three in four Americans (73 percent) say they use less cash today than 10 years ago (source: Mastercard). From online shopping with credit, debit and prepaid cards to making purchases via electronic apps, electronic money is convenient and easy to use, and is favored by most merchants because it enables electronic book-keeping methods that eliminate most human intervention.
Electronic ‘money’ is speed, convenience, guaranteed payment for merchants, and provides some security for consumers and merchants, while also enabling transactional records for governments.
There are two major risks however, when one transacts electronically.
1. Although not everyone is concerned with this… using electronic money will leave a definitive footprint, captured forever, of your every purchase (‘where’, ‘when’, and ‘what’). Your spending habits are quickly profiled and updated each time electronic money is used, most of it in databases that you don’t even know about.
Cash, on the other hand, is anonymous.
2. Since nearly all of our modern day transactional systems are electronic, if these systems fail us for any reason, we will be left without a commonly accepted means of exchange. This could include power failure (local or otherwise), internet/network failures, or even a financial/banking collapse.
Cash, on the other hand, will be accepted (by most), for awhile – at least up until such time that it may become clear that TSHTF (if it were to get to that point).
So it seems to me, that cash not only is king, but will be king (for awhile) during a system meltdown of some sort.
In today’s electronic world of money, there is only a comparatively very tiny amount of actual cash out there in circulation. If there is ever a panic, and enough people begin withdrawing some or all of their money from the banks, the cash might run out very quickly. Then what?
At least for the short term, if you have cash, you will be able to procure some things. Long term however, and we’re all in a different boat, so to speak…
How much cash to keep?
In a world of electronic money, how much actual cash money should one keep on one’s person and how much cash should one keep at home (be your own banker)?
Well that depends if you are going to eliminate most of your ordinary day-to-day debit transactions or not, and how much of a cash security blanket that you feel comfortable with.
When I made the transition from using my debit card (although essentially the same as cash) to using cash instead, I started out by simply going to the ATM and withdrawing a few hundred, and when I saw my wallet getting thin, I replenished it.
After a week or two of doing this, you will soon realize the appropriate cash flow for you. Not only that, but by using cash instead of debit (even though it’s the same ‘digits’), you will very likely begin to spend LESS than you did before. For some reason, using cash just seems like more money (because it’s tangible – even though it’s just paper).
A big advantage to using cash for transactions is that you will have more of it, on you, all the time. A merchant will always take cash – provided that their system allows it.
You can use it to get yourself out of a jam in an emergency. Ordinary ‘people’ will accept cash, because they are not equipped to accept your electronic money. If two people were bidding on the same thing or service (especially in an emergency situation), nearly 100-percent of the time the person with cash will win over someone with electronic money (debit or credit). Cash is king.
How much to keep at home (be your own banker?)
While it may sound over-the-top, if you can set yourself a goal to build a supply of 3 to 6-months worth of transactional cash that you would otherwise spend using debit/electronic, you would be doing yourself a favor. Look at it this way… the banks don’t give you any interest, so why should you give them your money?
During normal times, you won’t be tracked. During short term disaster, cash will be king. It’s up to you…