How Much Cash Should You Keep in Your Wallet?

The majority of Americans use very little cash anymore to pay for their everyday purchase. Now of days most people use checks, debit cards or credit cards to pay for their everyday purchases, such as gas, groceries, dining out, and the like. Even though paper money is becoming less common, it still makes sense to carry around some cash with you for situations where paper money's required, but how much cash should we leave in our wallets?

Clearly we don't want to put $1000 or so in a wallet, because if you were ever to lose it, that money would be gone instantly, never to be seen again. Let's face it, no one is going to turn in a wallet with that much cash into a police department if it's found. You hear stories every now and then of people who return large sums of money to other people without asking anything in return, but those are by far the exception rather than the rule. Make sure that the amount of money you keep in your wallet is nothing more than you can afford to lose without even feeling the slightest of a pinch.

We don't want to put a whole lot of money into our wallet, but we do need enough to get by for a bit. I'm very adverse to risk, so I like to keep at minimum $250 in my wallet for just in case I absolutely need it. You never know when you're going to be out on the road only to find out that your credit card has been declined for whatever reason, or perhaps the debit card system is down at the store you're at. Keeping a few hundred dollars on hand makes sure that you can spend a little bit of money and get by for a few days without having to rely on your credit card or your checkbook. This might be a bit over the top, but it's very reassuring to me that the money's there if I ever need it.

In addition to my micro-emergency fund that sits in another compartment of my wallet, I keep about $50 of miscellaneous bills in my wallet. The money goes for things such as tipping, going out to eat, snacks while on the road, pop machines, and the like. Keeping a few bills in your wallet comes very handy for a situation when plastic just isn't an option. For some people that might not be that big of an issue, but in rural South Dakota, there are always a few places here and there where you just have to fork over some cold-hard cash.

If you live in the part of a country where credit cards are absolutely and totally ubiquitous, you'll probably be fine with about $100 in cash in your wallet. Some of us prefer to keep a little bit extra in our wallets for emergencies or if any amazing deals suddenly appear out of nowhere, and that's okay too.