Is it smart to keep your money in cash?

You should keep some cash as it gives you financial stability. If you have too little, you could find yourself in a very difficult situation if you lose your job or if a financial emergency arises.

Is it smart to keep your money in cash?

You should keep some cash as it gives you financial stability. If you have too little, you could find yourself in a very difficult situation if you lose your job or if a financial emergency arises. Most experts recommend keeping a cash cushion for three to six months to play it safe. However, there is always the possibility that at some point you will lose your job or receive a large and unexpected bill.

If cash can't generate enough profits and can lose purchasing power over time, why conserve it? Cash can be ideal for short-term savings or in case of emergency. If you know that you'll need access to your money within a year, it may be worth saving cash. You may know that you'll be renewing in December and you plan to start saving in January. You can deposit that cash into a bank savings account, where you have no chance of losing value in the market.

It's also important to have easily accessible emergency savings. For example, if you unexpectedly need to repair a roof, it will be faster and easier for you to access a savings account. However, for any long-term savings, it might make more sense to put those funds on the market.