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Emergency and convenience cash.

Wednesday, May 21, 2014

I blogged about how we should always have a war chest to take advantage of opportunities in the stock market because what is worse than seeing the prices of our investments plunging? Not being able to increase the size of our investments at those lower prices (assuming, of course, that they are still good investments)!

So, I always say that there is nothing wrong with keeping a sizeable portion of our portfolio in cash. Cash isn't only the money we have in savings accounts or fixed deposits (which is my preferred way to keep my emergency fund and some of my money in my war chest). 

Money in the CPF-OA (up to a cap) and SRS account is cash that can be used for investments too.

Anyway, before I ramble on, this blog post is not going to look at cash in our portfolio. Huh?

This blog post is about emergency and convenience cash that I keep near me and I am not referring to the cash in my wallet. 

So, what is this emergency or convenience cash? It is cash that I keep at home and in my car.

I keep quite a bit of cash at home. This is handy if I have to pay for some repair that must be done by an electrician, air con technician or plumber, for examples. 

It is also handy when I order home deliveries for the family or decide to walk to the neighbourhood zhi char for dinner once in a while. Sometimes, I would ask friends (when I was staying out) or family to help me run errands and, of course, I had to pay them.

Keeping some cash at home is especially important if we do not have an ATM a stone's throw away from our home. Anyway, I really hate to queue at ATMs to withdraw money. I find it a time waster. 

OK, to be honest, it is not so much the time wasting but what I do to waste time. I don't mind watching anime for a few hours at a stretch. That is a more enjoyable way to waste time for me.

Amount of hard cash at home? Usually a couple of thousand dollars.

My money pouch at home.

Although it is quite rare but I have left home without my wallet before. The cash I keep in my car although not a lot is really handy then.

I would also make sure that the cash in the car is mostly coins and small notes. This takes into consideration how some places might not have change for bigger notes which happened often enough to leave an impression on me.

Amount of hard cash in the car? Usually not more than $50.00.

In an increasingly cashless society, I could be an odd ball, or do you do what I do too? I might lose out on some interest income but having some emergency and convenience cash works for me.

Related posts:
1. A special chest for emergency funds.
2. Why a meaningful emergency fund is important.
3. Emergency fund: How much is enough?


hydrogenperoxide said...

My rate of spending money = amount of cash in pocket.. Haha, cant held too much

AK71 said...

Hi pero,

Oh, it might work against people who spend money quite freely, I guess. ;p

The Sun said...

Given the near zero interest rates you can fetch on savings accounts from bank these days, holding a few thousand dollars in cold hard cash really would not make a difference to a person's net worth.

AK71 said...

Hi Sun,

Indeed so. A very small price to pay for convenience. :)

Cory said...

I do not feel comfortable without few hundreds in my wallet. Nevermind the spending speed as i need the flexibility. I do have a stack stash somewhere for CNY. I guess act as emergency fund as well.

AK71 said...

Hi Cory,

I guess we are both rather old school when it comes to keeping cash near at hand. :)

pf said...

I usually don't keep cash around. Not much cash even in my wallet. If I don't bring my wallet, I can still survive a day with my ezlink.

I use ocbc. No q at atm.

AK71 said...

Hi pf,

One day, I guess, all transactions will become cashless in Singapore. For now, I still feel safer to have hard cash close at hand. -.-"

FT said...

I usually carry about 1k in my ziploc "wallet" wherever i go. I also have cash that i keep in my shoe box at home too. I guess i am as rare breed as you are then AK or it simply means we are both chinaman. Cash on hand is always handy =)

AK71 said...

Hi FT,

One reason for writing this blog post is for me to find out if I am (increasingly) alone doing the stuff that I do.

I must admit, however, that this could be just a case of "old habits die hard". This is something I have been doing after misplacing my ATM card once years and years ago. I later found it. However, it was a very traumatising experience while it lasted. -.-"

Investopenly said...

Spare cash at home is a necessary to me as we don't know when we need "cold hard cash", even at home. So, you are not alone but I don't usually keep that much (in hundreds and not thousands).

Thanks for sharing

AK71 said...

Hi Richard,

Apparently, there are many more who keep cash at home than I thought. Yes, we never know when we might need some in a jiffy. :)

coconut said...

wow AK, you definately not a lone.

i don't have any credit/debit cards. i don't even have a cheque book believe it or not (my wife does).

i usually pay in cash unless the amount is too big then i'll go to the bank.

so i do carry a lot of hard cash with me, and i mean a lot, 20 to 30 times that of your amount haha.

AK71 said...

Hi coconut,

OK, I think I am normal. You are the abnormal one. LOL. ;p

coconut said...

about 2 years ago, i almost pay my car in cash, but the seller refuses haha, she must be afraid of something i don't know, so instead we go to the bank and do a transfer. i think that was the last time i was at the bank, can't really remember but i hate it.

now i use internet banking or my wife will do the banking stuff.

coconut said...

i learn this habit from a old business partner, you won't believe the amount of cash he was carrying!

enough to buy a top end sport car or any small business in cash! ofcos all in big notes.

he was a show off but had since pass away, he is my age!

AK71 said...

Hi coconut,

I hardly visit the banks as well. I go if I don't have a choice.

Wah! Your friend had so much money on him? I cannot imagine doing that. So risky. -.-"

Unknown said...

hi AK,

Started reading your blog and following on FB recently, it has been inspiring! At least it has motivated me to start itsy bitsy tiny weenie speck of investment!

haha baby steps....anyway, i keep old school piggybank!

mrtamjiak said...

I like to use credit card for payments! I get to earn rewards and good percentages for deposits! (I do pay back the cards in full, sometimes even before the bill comes. I am kiasu and kiasi of the credit cards interest rates!)

AK71 said...

Hi Anuenue H,

That is the way. Have a big vision but take baby steps. ;)

There are so many roads to Rome. The important thing is to start walking and we will get there one day. :)

You know what? I still have piggybanks! I have at least 2 which are full of $1 coins. LOL. Now, I still collect $1 coins but in pouches. Old habits. ;p

AK71 said...


I use credit cards too whenever possible because there are benefits, usually. :)

However, there will be places that don't accept credit cards. A good dinner at a neighbourhood zhi char for the whole family could set us back by $80 and this could be followed by shopping at the bakery and the fruits store. You know, fruits are expensive these days. Cash only. -.-"

There are many other examples but, for sure, if I could charge to my credit cards, I would. :)

BP said...

I only carry a few hundred at a time. most of the time under 500. You guys carry 4-5 digits. doesn't sound very normal. too rich.

The only cash I have is emergency cash which I put it in scb bonussaver to earn 1.88% pa. anyway I recently switched tover using the ocbc360. Not see if it really gives 3% as promoted. anyone here received the interest yet?

AK71 said...

Hi BP,

I don't carry that much in my wallet. Haha... It is a money pouch I keep at home. :)

AK71 said...

Lord Yap:
The key question is not whether CPF will fail or not in future, it is a good tool for Singaporean and if you follow AK closely, it is not his only tool. He has a full bag of 喳八郎。The only thing for sure in future, we will all die.

Romano Hoong:
You better start saving more money. In your own bank account or save the money at home

Keep money here, there and everywhere. ;p

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