WellPreserved wrote: ↑Wed Feb 21, 2024 11:21 am
highlandmum wrote: ↑Wed Feb 21, 2024 10:26 am
mommy_jules wrote: ↑Wed Feb 21, 2024 10:10 am
Why are we assuming the $5k is being kept for savings? It’s quite possible to have that on hand for cash purchases or what not. Also, not everyone has the same level of trust and knowledge of financial institutions. There are a variety of reasons why someone may choose to keep cash…maybe they are doomsday preppers. Idk. I do know that there are lockboxes and safes to protect cash and valuables, though.
Not saying savings in general. But I am not keeping it in my house where it is not earning interest. I did the same last time I purchased my car. I could have paid the entire thing off, but since the were giving me 0% interest and were not offering a discount if I paid cash I made my money work for me. I put it into an account where I earned interest and paid $1,000 a month out of it for 36 months. At the end of the 36 months I had over $4,000 remaining in the account. If I had paid cash for the car I would not have earned that $4,000. See what I am saying? You need to learn how to make your money work for you and just keeping it hanging around it is not doing anything for you.
Maybe being in Canada where our banks are a Oligopoly, and the chances of a bank failure is almost impossible, but on the other hand service and competition is at a all time low. We have trust in the security of our banking system.
I know that this just applies to me but I keep a lot of cash in my house but rotate through it as I make a lot of cash purchases so it makes sense. Also, it gives me comfort. But, I have multiple checking accounts including a high yield money market account as well as investment accounts so it's not like I'm being "stupid" by not investing. Frankly, how much cash I have is really only my business but it irks me that the assumption would be that I don't know no better and need to be schooled on finances. People have cash in their homes for a variety of reasons and most people know that that money could be "working for them" if placed in an account. They have made the choice that they would rather have the convenience and security of having cash available and it's worth foregoing the interest that money would earn them in a conventional bank.
I was not meaning "you" as a direct reference to yourself, sorry if you thought I was. I was meaning you as a collective general term. I was just asking because I know my money is very easily accessible within my traditional accounts - between interac, e-transfer, ATM, and traditional banking. Of course my parents had money in the house as it was different back then, you had to physically go to the bank to get money. But now with all the optional ways to pay it is a little different. I do have a few hundred in the house at all times but that is about it.
I looked on line and 85% of Canadians do not pay with cash, even for small purchases. Heck I am guilty of the $2.50 tap and go purchase on my debit card. I heard but not sure that it was 40% of Americans do not pay with cash. This may give you an idea why I am so confused about the cash in the house.