How Much Cash Should You Keep at Home?

Losing power is annoying. Losing power and realizing you can’t buy gas, groceries, or medicine because every card reader is down is worse.

Here’s the honest answer: most people should keep a small amount of cash at home—enough to cover essential spending for at least three days—then stop. More than that usually adds risk faster than it adds safety.

The quick verdict

Keep at home: Okay → Great if it’s “three-days-of-essentials” cash in small bills.

Keep at home: Risky if it’s “months of expenses” in cash.

Why? Because you’re balancing two real problems:

1. Payment systems fail sometimes (outages, storms, cyber incidents, local disasters).
2. Your home is not a bank (theft, fire, water damage, and plain old misplacement).

Ready.gov (U.S. government preparedness guidance) explicitly includes cash as a basic emergency-kit item and recommends supplies to last at least three days. That’s a useful baseline for cash too. (Ready.gov “Build a Kit”)

A practical rule: “Three days of essentials” cash

Instead of picking a random dollar amount, build your cash stash around what you’d actually need if cards/ATMs were unreliable for a few days:

• One grocery run of shelf-stable basics
• Fuel/transportation
• Any must-have prescriptions or medical essentials
• A little buffer for “weird stuff” (ice, batteries, diapers, pet needs)

That’s the spirit of the three-day guidance on Ready.gov. (Ready.gov “Build a Kit”)

If you live in a remote area, have medical dependencies, or you’ve personally lived through longer disruptions, consider stretching the target to closer to a week of essentials—but I’d still treat “a week” as the upper end for most households.

Small bills matter more than the total

When the power is out, change becomes a problem. A stack of big bills can be surprisingly useless. Prioritize a mix that lets you pay close to exact amounts.

What the data says about cash (and why it still matters)

Cash isn’t dead—but it’s not most people’s main payment method anymore.

• In the Federal Reserve’s nationally representative payment diary, consumers made an average of seven cash payments per month in 2023, and cash accounted for 16% of payments. Translation: lots of people still use cash sometimes, but most daily life runs on cards. (Federal Reserve: 2024 findings from the Diary of Consumer Payment Choice)

That’s exactly why a modest home stash is useful: it’s a backup for the moments your “normal system” (cards + phone + internet) isn’t available.

Here’s what they don’t tell you: the real risk is loss, not inconvenience

If you keep cash at home, you’re self-insuring against outages—but you’re also accepting physical risks.

Two big ones:

1) Cash at home isn’t insured the way bank deposits are

The FDIC puts it bluntly: “Cash that’s not in a deposit account isn’t protected by FDIC insurance.” (FDIC: Safe deposit boxes, home safes, and valuables)

If it burns, floods, or disappears, you don’t get a neat “undo” button.

2) Fire risk is not hypothetical

The U.S. Fire Administration reports that in 2021 fire departments responded to an estimated 170,000 home cooking fires, causing 135 deaths and 3,000 injuries. That’s not “cash-specific,” but it’s a reminder that homes are messy, human places—not secure vaults. (USFA: Cooking Fire Safety)

“For you if…” / “Not for you if…”

For you if…

• You’ve been stuck in a multi-day outage, or you live where storms regularly knock out power.
• You’re paid partly in cash or tip income and already handle cash responsibly.
• You want a simple backup that works when networks don’t.

Not for you if…

• Keeping cash at home tempts you to overspend (“it’s already out, might as well use it”).
• You’re trying to build an emergency fund and cash-at-home would replace bank savings.
• You’re keeping large amounts because you’re anxious about banks—without a specific, realistic scenario in mind.

My “Great / Okay / Risky” breakdown

• Great: A small stash sized to three days of essentials, mostly small bills, stored discreetly.
• Okay: Up to about a week of essentials if you have a clear reason (rural area, medical needs, frequent outages).
• Risky: Anything beyond that “because you never know.” Past a point, you’re mostly increasing theft/fire-loss exposure.

Storage: how to keep emergency cash without creating a new problem

• Keep it hidden and boring (not the obvious drawer, not labeled envelopes).
• Consider a fire-resistant, water-resistant home safe—but remember: a safe reduces some risks, not all.
• Split it into two locations so one incident doesn’t wipe you out.
• Include small denominations, and check it once or twice a year so it stays usable.

FAQ (especially if you’re switching your habits)

Should I keep cash in my emergency kit or just “somewhere in the house”?
Ideally both: a small “grab-and-go” amount in your kit, and the rest stored securely at home.

Is it safer to keep cash in a safe deposit box?
It can be safer from home theft/fire, but it’s less accessible during disruptions—and the FDIC notes safe deposit box contents (including cash) generally aren’t FDIC-insured. (FDIC: Safe deposit boxes, home safes, and valuables)

What if I want to move away from cash later? Is it easy to “switch back”?
Yes. That’s one advantage of a small stash: you can deposit it and be done. The bigger your at-home cash pile gets, the more it turns into a habit—and a risk you have to manage.

Do expense trackers solve the “I need emergency cash” problem?
Not directly. Tracking helps you plan and save, but emergency cash is about payment access when systems fail. They’re complementary: one is budgeting; the other is resilience.