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While having a little species We can be useful in a emergencyIt is important to consider where you keep it. Some people hide it in discreet places from the house, a habit which, according to experts, can cause problems.
The typical person has around $ 544 in cash and value such as coins, banknotes and ingots at home, according to a new survey of the Financial Management Piere application. The site interviewed 1,500 American adults at the end of January and early February.
When they were asked where they keep their money at home, about 10% of respondents store it in a safe, making it the most popular place.
The other spots are less conventional. About 6% hide their money in a secret compartment like “a drawer that has a false side that you cannot see,” said Yuval Shiner, founder and CEO of Piere.
6% additional respondents said they keep the money under or in a bed, a mattress or a pillow, while 5% keep the money in a freezer or a refrigerator. The smallest actions of those questioned declared that they retained money in an ornament, a vase or an urn (4%), or under boards or a carpet (3%).
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Times of economic uncertainty can lead people to have more money, said Shannon Martin, approved insurance agent and content editor for Bankrate.
But don't do it too much, say the experts.
The storage of money at home does not give you the same protections that you get with an account in a guaranteed financial institution. You are also likely to lose potential gains in high -performance interests or stock market yields, said the Shuer of Piere.
Risks with hiding money around the house
Having too much money in the house can expose you to a number of problems. On the one hand: your home insurance policy may not protect the total amount.
Articles like Cash tend to fall under a subcategory called special limits, said Martin de Bankrate. This means that the value covered is capped at a certain amount, which may depend on your insurer, she said.
Most home insurance policies will have coverage of $ 200 to replace cash, parts and precious metals, Bankrate find.
Some insurers offer higher limits. You can also question your insurance agent on approval to increase the coverage, but you must then prove that you have a sum of money in your home, said Martin.
“If you try to make the complaint for $ 10,000 of money that you have stuffed in your mattress, there are probably a lot of questions on this subject,” she said.
Deposited money in an account that is protected by the Federal Deposit Insurance Corporation will be safer.
“If you keep it in a bank, the bank has insurance,” said Martin. “If something happens to your money at home, you only have what is listed on your policy.”
This can make money lost or stolen difficult to replace, even in the face of natural disasters.
If your house is affected by a danger like a fire and you have large sums of money scattered in your home, “you have this money which is now smoke, potentially,” said the certified financial planner Lee Baker, the founder, owner and president of CLARIS Financial Advisors in Atlanta. He is also a member of CNBC advisers council.
Where to keep your money instead
Do not hesitate to have money at home.
“I am in a hurricane where the power had been released for a very long time and the automatic ticket distributors do not work,” said Carolyn McClanahan, CFP and founder of Life Planning Partners in Jacksonville, Florida.
At this point, “cash is King,” said McClanahan, who is also a CNBC FA advice member.
Baker agreed: “Having enough money to make you spend a day, maybe two, makes sense.”
Instead of hiding your savings in drawers, libraries and secret compartments, here are three other places to keep your money:
1. A high -performance savings account
Experts say you want to have enough money in your current account to pay a month of invoices. Keep anything more than that in a savings account, and ideally, a high -performance savings account.
In March, some of the best high -performance savings accounts offer an average of 4.20% APY against 0.6% APY, according to Tickets.
“It's just money they leave on the table,” said Shumine.
2. Investment accounts
Money for medium and long -term objectives is generally better invested because inflation erodes the value of your savings. While the market can be volatile In the short term, on a long calendar, investment returns will generally exceed inflation, said McClanahan.
“Money does not go beyond inflation,” said McClanahan.
Although recent market volatility can be intimidating, experts in general Recommend investors Focus on their long-term goals.
“You could leave thousands of dollars that you could win in next year just there not sit in the right places,” said Shumine.
3. A “personal financial bag”
For emergencies, have enough money to master yourself for a day or two in a “personal financial bag” at home that you can simply enter in the event of a fire or other emergencies, said Baker.
Remember to keep this bag in a safe and fire safe, said Martin de Bankrate. If something happens, you may still be able to go and get the money, she said.
Whether you have a safe or you opt for another place, keep the money in one place in your home and make sure everyone in your family or your household knows where they are, said Baker.
“I would not encourage emergency funds in too many different places,” said Baker. “In emergency time, things should be simple.”
