Are you wondering, “How much cash should I have on hand?” There are two ways to look at this question. One meaning is how much actual currency (say, $20 bills) you should keep in your wallet or at home. Another way to look at that question is how much liquid money should you have available in case of an emergency, such as cash in a savings account vs. equity in your home, which can be a challenge to tap into quickly.
This guide will cover both of those scenarios and help you understand the importance of having some cash accessible when needed, whether in case of an emergency or for everyday spending.
Table of Contents
Key Points
• Determining the right amount of cash to keep on hand involves considering both physical currency and liquid assets for emergencies.
• Working individuals should aim to save three-to-six months’ worth of expenses in an accessible emergency fund.
• For retirees, it’s advisable to have three-to-six months of living expenses readily available, with some experts recommending up to 24 months.
• Keeping a certain amount of cash at home — anywhere from $300-$1,000, or so — can be practical for immediate needs during emergencies.
• The amount of cash to carry daily might vary, but having around $100 can be useful for minor cash-only transactions or emergencies.
How Much Cash Should You Have if You’re Still Working?
First, consider how much cash the typical employed person should have available. You may be at a stage of life when you are putting away money toward certain financial goals, such as retirement or your child’s college education. That’s money you don’t want to touch.
Which is why you also likely need to have money in an emergency fund. This is money you can quickly access if you have an unexpected medical or car repair bill, or if you lose your job. This money can tide you over and help you avoid resorting to using your credit cards to pay for things. Credit card debt is high-interest debt. According to the 2025 Consumer Credit Card Market Report of the Consumer Financial Protection Bureau, the average annual percentage rate in 2024 was 25.2% for general-purpose cards and 31.3% for private-label cards, the highest level since at least 2015.
Financial experts usually advise that people add up their monthly expenses: housing, food, health care, utilities, discretionary spending, etc. Then, you want to put away three-to-six months’ worth of those monthly expenditures. That money doesn’t have to be accumulated all at once. You might automate your savings and have a small amount transferred from checking into an emergency savings account every time you get paid.
What’s nice about an emergency fund is that the money is immediately accessible when you need it. Unlike, say, the equity in your home, your invested funds (whose value can rise and fall), or a valuable family heirloom, the cash is ready and available. A good place to keep it might be in a high-yield savings account, where it will be insured up to the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA) limits.
Recommended: Find out how much you should save for unexpected expenses with our emergency fund calculator
How Much Cash Should You Have if You’re Retired?
If you’re retired, the same basic thinking holds true about how much cash to have available. Whether you’re on a fixed income or still bringing in some kind of paycheck, you’ll want to have at least three-to-six months’ worth of living expenses available.
Some experts suggest that retirees should keep more than that amount in cash available. They believe that 12-24 months is a wiser number. That way, if you’re hit with a major medical bill that you can’t negotiate down, you’ll be able to tap your cash vs. sell off investments. That’s an example of why an emergency fund is a priority.
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How Much Cash Should I Keep at Home?
Now that you understand how much cash to have available in liquid form, consider how much literal cash (as in the bills you get when using an ATM) to keep on hand.
Of course, you don’t want too much cash sitting in a drawer when it could be safely in a bank or credit union, earning interest. But it can be wise to keep at least some cash on hand.
For instance, you might imagine what would happen if a mammoth storm came through, knocking out power to a portion of your town and leaving many businesses closed. You might need to fill your gas tank to drive to the next town over for food, or you might have to pay for emergency supplies or refill a medication prescription.
While some people may want to keep a larger amount “just in case,” the prevailing wisdom is to have no more than you may need in case of an emergency, which may be anywhere from a few hundred dollars to $1,000 (potentially more for bigger households). If you keep a lot of cash at home, you may want a home safe. Otherwise, theft, fire, and simply forgetting where you stashed it could be issues.
How Much Cash Should I Keep in My Wallet?
How much money you need to keep in cash in your wallet will vary. Many people today use their debit cards and payment apps for daily spending and carry very little, or even no cash. But having some money, perhaps $100 or so, can be a good idea.
You might wind up needing to buy something at a local cash-only business, or you might be purchasing something from a store that adds a surcharge for cards or mobile payment apps to recoup the fees they are charged. Having a bit of money in your wallet could help you out in this situation or others like it.
Recommended: 7 Places to Put Your Cash
Where Should I Store My Cash?
An emergency stash of cash kept at home is generally best stored in a waterproof, fireproof safe. Beyond that, you might consider keeping day-to-day money in a checking account and emergency money in a separate savings account. That way, you don’t need to battle the constant temptation to spend it. Keeping cash in a bank account insured by the FDIC and earning a solid interest rate is a wise move as well.
The Takeaway
Determining the right amount of cash to have on hand requires considering factors such as how much money to keep in a savings account for emergencies and how much to keep in a checking account and in physical currency for day-to-day necessities. Ultimately, the goal is to strike a balance: ensure your funds are accessible when needed, while keeping them safely stored and earning a higher interest when possible.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
FAQ
How much cash should the average person keep at home?
According to the Federal Reserve’s Diary of Consumer Payment Choice, the average American keeps $306 stored away as “backup” money, as of 2024. A 2025 survey shows that 39% of Gen Z keep less than $500 at home, while over 75% of those between 55 and 64 keep less than $500 at home. That said, it can be helpful to have some cash on hand in case of an emergency.
How much cash does the average person carry?
The average American carries $67 in cash, according to a Federal Reserve study. However, that figure can vary widely.
Why do people keep large amounts of cash at home?
Some people may feel their money is safest at home, close at hand. Others may be unbanked, without an account in which to stash their cash. Still others may want the reassurance of having some dollars available in case of an emergency.
Is it wise to keep cash at home?
It can be wise to keep some cash at home. Perhaps you want to run to the farmers market and make a purchase in cash without stopping at an ATM. Or maybe there’s an emergency, and your local ATM is out of cash. Having cash on hand can be very helpful. However, it’s generally best to keep your money in a checking or savings account, where it has the potential to earn interest.
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