Those who believe in investing in assets and stocks may find cash saving absurd. However, a recent survey revealed that nearly 43% of Americans prefer to keep their savings in cash. Interestingly, more than half of these Americans plan to stash their money in secret home safes. On the surface, it might seem like a brilliant idea. There is, however, a downside to stashing cash.
Why Are Americans Opting for Home Safes?
The leading reason is mistrust. Over the past two decades, Americans have seen enough financial distress to stop trusting banks and government-funded financial institutes. Similarly, the last decade was full of unexpected tax hikes, and many banks have increased the fees they deduct solely for letting you keep your money in their lockers. Home safes, in contrast, seem like a one-time investment where your one-dollar bill will remain a one-dollar bill no matter how long it stays there.
The economic instability has also shaken public trust in investment vehicles, such as stocks. It is one reason many people believe that they might as well keep their savings in cash rather than taking the risk of investing it. There is no surprise that they are stashing cash instead of making an investment.
All of these factors have played a role in driving a growing part of the population back towards saving money in home safes.
Better Safes with Better Security
Additionally, there are a few developments that make home safes seem safer. First, companies develop more innovative and safer products that make you feel like you have more control and freedom. Second, many insurance companies provide insurance for the money you are keeping at home.
Is Stashing Cash Really a Good Idea?
Stashing cash might seem like a smart idea, but the drawbacks are real. Here are some reasons it may not work as much in your favor as you are expecting.
First, it is not safe. Stashing cash at home makes it vulnerable to more threats than keeping money in the bank despite the insurance policies. Most insurance policies only cover theft or robbery, but some incidents can turn that cash into a pile of trash. Whether fire or flood, your money will be worth nothing if it is ruined in an incident that the insurance provider does not cover. Worst-case scenario: Imagine your pet or toddler find your cash and tear it to bits. This is the kind of incident insurance providers are not likely to protect your savings against.
Cash Does Not Grow
As the value of currency changes, the worth of your cash decreases; while your one-dollar bill will remain a one-dollar bill decades later, you may hardly be able to buy half of what you can buy now. On the other hand, a standard savings account will earn enough interest to cover the time value of money.
In simple words, money kept in your home safe is hardly even safe.
When Is It Best to Stash Cash?
Keeping cash at home for the sole purpose of keeping your money safe is not prudent. However, it does not mean that it is always a bad idea for everyone. The only good reason to keep cash at home is when you do not plan to save it for long or when you finally take out all your savings and plan to spend it.
Not relying on banks and hiding your savings from the watchful eyes of the government may seem like a smart move, but it limits your chances of making more money out of the cash you have.About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.