Some of you may not be old enough to remember, but there was a time not long ago when leaving the house without at least a little cash in your wallet or purse was unthinkable. You never knew when you might need to spend money, whether it was paying a restaurant bill or filling up a gas tank or picking up some groceries before heading home. Life was just a series of cash exchanges waiting to happen.
But paper currency has become increasingly rare in our daily transactions. Credit and debit cards are accepted just about everywhere, and "minimum purchase" requirements are becoming things of the past. You can pay for taxis with an app, split a restaurant check with a friend by using Venmo, and pay for just about anything else with PayPal. If you have any cash on you at all, it never gets touched.
Until that one time when you need it. Believe it or not, there are still moments in life when you'll need cold, hard cash. And when that happens—and trust us, it always does—you'll need to consider things you haven't thought about in years. Like, "Do I have enough money?" That's not usually something that goes through a person's head when they're paying with a credit card. If something costs $20, then your card just magically pulls that amount out of the ether. But if you're paying in cash, then you need to have at least $20 on you.
So how much should you have? What's a reasonable amount to carry with you in case of an emergency? And by emergency, we mean finding yourself in a situation where either the electronic transfer of funds isn't possible, or it's a situation we're slipping a few bills into someone's hand is your only option. Tipping a service person, for instance, or donating to a lemonade stand being run by neighborhood kids down the block. Nobody should be the guy who tries to buy sidewalk lemonade by asking, "Do you take American Express?"
As you can imagine, there are a lot of opinions. A survey from Money magazine found that 42 percent of the people carry no more than $40 in cash, 30 percent carry between $41 and $99, 17 percent carry $100 to $199, and 11 percent carry $200 or more. No explanations were given for what they picked those certain denominations.
So we decided to find out. We scoured the Internet for collective wisdom, checking everything from "expert" financiers to opinionated Reddit users, to see if we could find a consensus. Everybody has an argument, and believe it or not, there actually is some common ground. By popular opinion, based on dozens, if not hundreds, of people who still have belief in the power of paper money, the official tally of how much cash you should carry with you at any time is…
$200.
Why Two Hundred?
Because it's enough to handle a standard emergency, but not a cataclysmic one. It's not going to save you if you need to leave town and set up a new identity to escape the mob. But let's say you're at a restaurant and you try paying your bill with a credit card. It gets declined. You don't understand, there must be some mistake. Your server tries it again, and still nothing. You can call the credit card company and get to the bottom of it, but who knows how long that could take. Better to just pay off the bill in cash and get the heck out of there.
There are any number of situations in which paying with credit might not be an option. And having a single $20 bill in your pocket will not get you out of every tight corner. According to budgetyourtrip.com, it costs an average of $221 per person for each day traveling within the United States. So $200 is a nice, dependable amount that should cover just about anything.
Keep It Mostly in Twenties
A pair of Benjamins might be less physically cumbersome, but it won't be ideal in every emergency scenario. If you need the extra cash for something like, say, getting towed out of a ditch or getting a jump-start from a good Samaritan in the middle of it deserted road, slipping them a few twenties for their trouble is a lot easier than asking if they could break a hundred.
It's Enough For an Impromptu Grocery Visit (and Could Save You Money)
Have you ever made a quick trip to the grocery store to pick up one or two things and ended up walking out with your groceries for the week? It happens to all of us, and that $200 in your pocket should be more than enough for everything you need.
Why pay in cash when you could more easily use a card? In a 2008 study published in the Journal of Experimental Psychology, researchers found that participants spent 21 percent more when using a credit card to purchase ingredients for a Thanksgiving dinner ($175) than when paying in cash ($145). When we slap down a credit card, it doesn't feel like we're actually losing anything (until you check your balance later on). But with cash, you're acutely aware of what you're giving up with every purchase, so you're more careful to pick out only the things you really need, at the prices you actually want to spend.
Have At Least $20 in Fives
You never know when you'll need to tip somebody, whether it's your barber, barista, or bellhop. Having a few wrinkled singles isn't going to help you; we live in 2018, not the early 20th century. According to Business Insider, standard tipping for everything from dry cleaners to hotel maids to parking valets is between $5 and $10. So having at least a few of these bills on hand will ensure you're always prepared.
Avoid One Dollar Bills
Why? Because they're freaking filthy! Cash, in general, is pretty toxic, but dollar bills, in particular, can be nastier than you ever imagined. Researchers from Ohio analyzed several dozen one dollar bills at random and found that 87 percent of them were infected with bacteria. Just think of anything a dollar bill is still used for in a modern world. Exotic dancers, for one. And maybe handouts to homeless people. That's about it. Is it any surprise that most dollars aren't exactly hygienic?
You may never need that $200, but you'll rest easier knowing it's there. If it gets lost or stolen, it's not enough to break the bank. But in the off-chance that technology breaks down or you're faced with a situation where having some bills will get you out of trouble faster than finding the nearest ATM, you'll be happy it's there.
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