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birb_cromble  1mo ago (text post)   1308 thread views

Weekly Finance Thread

Since a lot of us here have expressed interest in not starving to death in a gutter, I figured I'd start a weekly thread to discuss financial matters.

Ground Rules

  • Remember that we're all just Internet randos. Don't bet your life savings on a hot tip from this thread.
  • Keep culture war in the culture war thread. Yes, global events may impact our personal finances, but that does not mean we have to incessantly harp on culture war aspects here. If you are going to discuss it, please stick to the practical impacts of it on an individual level.
  • Be kind. Remember that everyone here comes from different circumstances. We all have different resources available and different risk tolerances.
  • Don't let the perfect be the enemy of the good. Better is better. Celebrate people when they take a step up and work to move their finances in the right direction. Don't flame out because they haven't followed what you consider the optimal path. Everybody has to start somewhere.
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How much emergency cash do people keep around? and where precisely so I know where to look I don't mean uninvested money in a checking account or whatever, I mean literal cash not in a bank.

I have a few thousand, which might be too much, but zero feels like too little.

Around $2K. I spend cash rarely so it's mostly cash that I've been given by others that I have not deposited. Since it hasn't been withdrawn by me either it's untraceable to me. I primarily use it in the event I can get an under-the-table cash discount from tradesmen in Minecraft.

Enough that if i'm stressed and not keeping pace with life that i'm still good for a month.

No cash, at all. I walk around downtown a lot and don't like lying to bums. "No, sorry."

I generally have 500-800 in my wallet and another 1000-1500 in the house, but I play poker regularly so there is an actual use case. Absent that, I would probably keep 200-300 in the wallet and 500 in the house. I'm Gen X though and almost exclusively used cash (with the occasional check) until my late 20s, so it's a habit.

Interest on $1000 is what, $4/month tops? I'd rather have the flexibility.

$500 in golden dollar coins and $300 in paper.

What, in case you get Isekai'd to a fantasy realm?

I like tipping with them, or paying for stuff at conventions. It's a conversation-starter.

That's... pretty clever, actually. What's the best way to acquire them? Do you just get them from your local bank, or what?

The bank gives them to you in $20 rolls, some of them are susanBanthonies, but I just use those first and put the rest in a decorative wooden box thing. I'm a child at heart.

Literally nothing. I don't even have any notes in my wallet.

What are you keeping it for? In a situation where the electronic banking system goes down for a meaningful amount of time, I'd rather have food stockpiled than cash (although you can of course have both).

Several years ago, my bank card was compromised, and when I went to use my credit card, it automatically locked because of "suspicious activity". This all happened on a three day weekend when I couldn't straighten it out easily. It taught me the value of having some cash on hand for essentials.

Awhile ago I had to call my bank in advance to seek approval for a very large transaction that I 100% knew was going to get denied and flagged as fraudulent. They were able to extend my limit for the day and I was able to get the transaction split into two separate bills, 50/50 and it went through just fine. There was another time when I was moving money between accounts, one into an Venmo account, and somehow a small online transaction got denied, using my debit card. It was such a pain in the ass to contact Venmo customer support (it’s intentionally buried in layers of bureaucratic bullshit), they couldn’t process it through. The usual “Uh. Yeah. Sorry. Don’t know what it is but can’t help you.” Anyone that’s been a supporter of FinTech companies over the years has obviously never had to resolve a problem with them when things go wrong. There’s a lot more rot underneath the “innovation” of these businesses than is imagined.

A mundane example would be something like identity theft. Freezing/closing compromised/fraudulent accounts can be time consuming, and paper currency can bridge the gap until new accounts can safely be established.

I usually keep zero cash. I have usually $1k in a checking account and $20k in savings accounts.

Literally paper cash? Usually $500 to $1000 (some in the wallet, other in desk drawer). I have an ATM within 10 minutes reach, haven't ever felt I need more.

Twenty grand in benjamins.

We've got a couple hundred sitting around for tipping housekeeping.

Otherwise, I feel like I should have some (a couple thousand?) in our go bag. The issue is I don't know how to size it: in a scenario where banking and payment infrastructure is shut down entirely, what problems am I trying to solve with cash? Seems like extra ammo would be a better use of the space. Maybe gold jewelry if I expect to be moving abroad?

The issue is I don't know how to size it: in a scenario where banking and payment infrastructure is shut down entirely, what problems am I trying to solve with cash?

The banking system need not fail generally for backup cash to be useful, it just needs to fail you. This could be through some bank error, or it could be because you got put on a list. Not long ago I would not have predicted that "donated a small amount to a non-violent protest movement" could result in your bank assets being frozen, but it happened in Canada. Now I think it's wise to assign some low probability to otherwise innocuous things exposing you to this kind of risk.

As anti-AI sentiment builds perhaps "frequently commented on SlateStarCodex" could be reason enough to freeze a person's assets.

in a scenario where banking and payment infrastructure is shut down entirely, what problems am I trying to solve with cash?

I think this is a worthwhile question: I don't use cash often, but a few times I've needed to settle up things like group meals ("no split checks", ugh) it's often a hassle to deal with change since nobody has much. Can't pay $27 with just twenties, but people aren't ready to round to the twenty. Few carry enough smaller bills to break a twenty. We usually end up doing Venmo or whatever.

Not sure what to suggest, honestly.

My husband needed around 5k in assorted denominations. I need around 1k in bills no larger than 20s, and $100 in quarters. Neither of us had a convincing argument for why our way was correct.

For cash, usually zero to a thousand or so. I don't pay particularly close attention to keeping it up. It's more for if I'm about to go somewhere but find I don't have that much cash in my wallet, it's slightly easier to grab some than to stop at an ATM, though that's not at all hard either. I don't take it too seriously as emergency prep, mostly since living in a big city, any massive crisis that results in me not being able to get more cash from ATMs easily or buy things with cards will also cause much bigger, more widespread, and difficult to predict chaos that a little cash is not likely to save me from.

What I do consider as more useful emergency prep to keep safely stored at home is a valid working credit card and ATM card, working spare phone with no service, and expired spare ID. I can lose pretty much everything I typically carry on me and not experience significant hassle.

Right now, zero, but I think you're right that it should be nonzero. I'm going to start keeping some cash around, I think.

I think I have about $3000 ish in a safe. But sometimes it gets dipped into and not replenished when we are too lazy to hit an atm.

That said, the safe also has about $20k in gold though. Didn't mean to, but 6 oz appreciated in value a lot the last 10 years.

Check again. 6 oz is more than 20k.

I have a few thousand, which might be too much, but zero feels like too little.

Same, and my brain won't shut up about how it would make much more sense for me to add it to my mad money brokerage account and reap the extra GAAAAINZ. But then, it's emergency money, it's doing exactly what it's supposed to be doing.

If it makes you feel any better, think of it as insurance.

If you invested $1,000 in the S&P 500 five years ago, you'd get a 77-78% return. Amortized over 5 years, that's about ninety-seven cents a day. How much is it worth to you to have cash handy if your card gets stolen and your bank is closed? Is it a dollar a day?

hmm that makes me want to have less emergency savings, not more... I started a fight with my wife over a $1/mo. charge when we first got married.

I usually use the cash drawer for more routine emergencies like "omg, I am late to my hairdresser appointment and I forgot to get the cash! - No worries, my dear, just take it from the cash drawer!" or "The gardener says he wants cash, have you got any cash?" The drawer has enough to cover any such inconvenience and gets replenished within a week.

For losing the wallet (or getting the walled chewed up by a puppy, ask me how I know) I have a bunch of cards that I usually use once a twice a year but they can serve as replacement for my regular ones for a while, and if I need to identify myself to the bank (like, to replace the stolen ATM card while the ID is stolen too) I can use my passport. Theoretically it'd be prudent to store a couple of copies off-site in a secure storage too, but in practice I'm too lazy to do that. Maybe I should.

I've got about $20 in cash in my wallet and probably $5 in quarters somewhere in the car.

None in my crib, aside from some loose foreign bills and coins in various currencies I’ve accumulated from trips abroad over the years and have been too lazy to deal with.

I do keep a small amount of cash in my wallet in case I want to spontaneously buy dru— errr, something from a food truck and it doesn’t take card. Yeah, that’s it.

I wouldn't sweat the opportunity costs of not having invested a few thousand dollars or so, especially if it buys you peace of mind. After some number of years of being an investor, a few thousand dollars becomes trivial compared to your overall net worth.

I try to always keep $40-50 as a minimum on my person (separate from my spending cash in my wallet).

As far as cash in the house beyond that? None. The situations where I will need cash in an instant and a check/electronic venmo/run to the ATM won't work are... basically just an EMP/solar flare situation that I for some reason can't wait out for restoration. Maybe that happens, I run out of food in a week, there's still no government response, but the stores have product they're willing to sell for cash only?

Perhaps I'm unimaginative, but it just seems too unlikely to be worth worrying about for me personally. Not that there'd be any harm in keeping extra cash in house, though, so it's not a terrible idea just for things I haven't thought of and/or convenience.

Maybe it’s different for you, but for me:

  • I had my wallet stolen once, so no card.
  • Sometimes the fraud systems flag you, no card.
  • Potentially a cyber crisis or run on the banks.
  • Sometimes, rarely, you need to pay for something in cash and you have withdrawal limits.

It’s mostly the first two. Given that banks take a week to replace cards, I think you need at least a week of money hidden at home.

Sometimes the fraud systems flag you, no card.

For me, that's more likely (both to happen and to have immediate requirement) when I'm traveling, hence (one of the reasons for) keeping a nominal but not bank-breaking "emergency cash" in my wallet. Plus multiple cards, including with differing institutions.

I've got multiple credit cards plus a bank card all stored on my phone. When my banks have flagged transactions as fraud, I'm able to authorize them via SMS. IME digital wallets continue to work even if a card is deactivated for some reason and replacement cards are mailed overnight, so the opportunity cost of keeping thousands under the mattress outweighs anything else.

I've also never had a situation where I had an expense that positively could not be put off for a few days and was payable in cash.

Usually between fifteen hundred and three thousand in the safe, plus another two or three hundred in my wallet. Enough to get me through a month or two of room and board, and also useful for unexpected expenses.

I'm extremely conservative by the standards of this forum, and I keep $1,000 cash in my house. That's enough to get me a couple of weeks of my bank account gets hacked or something.

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