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I keep $10k in cash in my home and $15-20k liquid in a high yield account. To each is its own but I can't feel 100% comfortable without being able to access SOME money. Hurricane Matthew hit North Carolina pretty hard, so that made me realize its best to have some cash accessible at all times.
I am very cash poor, but deliberately so. I use virtually all excess cash flow to make principle payments on my mortgage. My money market < 1% interest rate vs. my mortgage rate at 3.375%. I should have my mortgage paid-off in ~6 years at which point I'll increase my monthly contribution to the Total Stock Market Index fund.
At retirement (still 12 years away)----I'm thinking about holding 3 years of expenses in a Money Market so I shouldn't have to sell equities at a loss if the market's down.
nothing sucks more than being house rich and cash poor . things happen when you least expect it . you can't get to that home equity easily or without incurring more expense's and costs to access it . .
We've normally kept $40-$50k in an online account earning 1%+ but we're going to ratchet that down to $10-$15k in the next few months or whenever this market cools off a bit. We carry $0 cash in the home aside from $3k in Japanese Yen we received from our wedding several years ago.
As others have noted, I just don't see the reason to keep that much around anymore. We have about $300k in home equity so a HELOC would be an option if we ever needed it, not to mention our stocks/mutual fund investments. IMHO, I think the 6-8 month emergency cash principle applies to those who have no other savings.
We went through Hurricane Matthew as well (we're a mile away from the beach in NE Florida) and it wasn't a problem getting $500 out of the ATM a week prior.
For the first time we are having to keep large amounts of cash on hand, in our first-ever safe. I really dislike this aspect of the culture here. Major stores will take credit cards, but no service or labor will.
I was so used to the cash-less U.S. culture, it was a major life-changer. Now, whenever we leave the house we have to check with each other, "Do we have bus fare, cab fare, restaurant fare? Cash to pay our electric and phone bill?". Oh, here's the water truck, $140 cash!
It's uncomfortable, but I guess we'll get used to it eventually. It's all about trade-offs!
Our financial advisor did advise us to keep like $20,000 available in an account for "emergencies". Not the investment portfolio, but in the money market account.
I've never been one to have lots of cash on hand. By cash, I mean checking, savings and money market accounts. Cash in the wallets counts as does a vault loaded with cash, or cash in a safe deposit box.
Just learned that my FIL has $20,000 stashed in a safe deposit box. Haven't personally verified it but this is what I've learned. Had a client one time who learned his deceased brother had $80,000 in a safe deposit box.
Did have some six-figure cash recently from sale of residence and it felt awkward. Then we got rid of it buying a second home.
My approach to excess cash has been using it to pay down real estate loans and have a home equity line of credit to draw it out when needed. This approach worked exceedingly well and thanks to a little intensity and compulsiveness, we're now debt free on all real estate debt.
To me more than $10,000 seems like excess cash but we do have a $300,000 home equity line of credit if quick cash is needed. And, I'm still in the "rat race" earning an income.
I quit carrying a wallet 18 years ago. lol. I usually never have more than a twenty on me or more likely, nothing. I do have access to cash, but 99% of purchases are via credit card.
I know people who believe they have to carry thousands around. Why? Maybe the bank won't be open, or its the weekend... To each their own.
I am very cash poor, but deliberately so. I use virtually all excess cash flow to make principle payments on my mortgage. My money market < 1% interest rate vs. my mortgage rate at 3.375%. I should have my mortgage paid-off in ~6 years at which point I'll increase my monthly contribution to the Total Stock Market Index fund.
At retirement (still 12 years away)----I'm thinking about holding 3 years of expenses in a Money Market so I shouldn't have to sell equities at a loss if the market's down.
So the reality is you have 6 years to go before building your 3 year expense fund so what's the actual timing to retirement and the ability to add to the total stock market index fund?
I've always large amount of cash in my checking account. I don't have any balance in any credit or HELOC account. So what? I don't have to worry about spending. It's been that way for years. It's earning a big fat ZERO interest rate. To me it seems like a lot of work to get a big of money from create a savings account and then you have to pay tax on it. Too much pain for very little gain.
I do not keep a large amount of cash in my checking account because if it gets hacked, then the amount of time and effort involve in GETTING IT BACK will often outway the actual loss.
I have a very decent net worth in the six figures (IRA/401k/investment account)and I have $500 in cash (this is my "emergency fund"). I typically only keep $100-$300 or less in my checking account after payday. The other day I decided to float a friend $400 for a couple days. later that week I needed money for a cash purchase. After that I was down to $20 in cash until I received my $400 back.
Like others have said, for me this is intentional. I use my credit card for every monthly expense I have other than my haircuts, which my barber only takes cash. I'll use cash when I go out to eat with friends to make it easy if we can't split the bill. Pretty much no other purchase I don't make with a credit card.
My finances kind of go like this. My monthly expenses come out on the 1st, I payoff my credit card balance in full and transfer the rest less $100-$200 to Fidelity.
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