Optimal Finance Daily - Financial Independence and Money Advice 3375: Should Cash Be Part of Your Emergency Fund? By Honey Smith with Get Rich Slowly on Smart Emergency Planning
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Dec 4, 2025 Explore the intriguing debate on whether to keep cash in your emergency fund. Uncover the benefits of having physical cash, like peace of mind and protection from garnishment. Weigh the trade-offs, such as losing interest and the risks of theft. Dive into practical advice on how much cash to store and effective hiding methods, from diversion safes to safe deposit boxes. Learn why cash could be a lifesaver during power outages, ensuring you're prepared when digital options fail.
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College Wallet Fairy Sparked Money Lessons
- Honey Smith recounts receiving a 'wallet fairy' in college that promised you'd never be out of money when needed.
- She uses the gift to introduce her own money struggles and eventual lessons about emergency preparedness.
Cash Reduces Temptation But Loses Interest
- Physical cash can reduce temptation because it's out of sight and out of mind compared with an online account.
- But holding large amounts of cash sacrifices interest and exposes you to inflation erosion and lost earnings.
Cash Is Private But Irrecoverable If Lost
- Cash offers peace of mind because it's hard to garnish and not easily traced.
- Conversely, if cash is lost or stolen you have little recourse and it's effectively gone forever.