How Much Cash Should I Carry?

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How Much Cash Should I Carry simple money

This is a very common question that people come back to and reevaluate time and time again. And really I would say that less cash = less risk. We live in an age where we can pay for almost anything with a credit card, heck we can even use our smartphone (although I wouldn’t endorse using ALL the apps available on smartphones to pay for things) and don’t even need to carry a purse or wallet.


Even if we get mugged, we can call and cancel our credit cards. But the cash we carry is gone forever and there’s really nothing we can do about it. Except learn from it and perhaps carry less in the future. But how much is really enough?



Cash VS Credit Psychology


Studies have shown that it’s more painful from a psychological standpoint paying for things in cash rather than credit. And paying for items in credit “dulls the ‘pain of paying’ for two important reasons: (1) there is a separation in time between when the credit card is used to buy something and when the bill has to be paid; and (2) using a credit card allows different purchases to be mixed together” (


So in favor of this study, I may be going against the popular consensus to say that we should be carrying more cash to prevent ourselves from frivolous spending and having our psychological better half come into play. The article mentions several studies which favor purchasing good and services using cash rather than credit cards including the above from the Journal of Experimental Psychology: Applied. In another article from the Chicago Tribune, consumers who use credit to purchase may focus on an items features, brand, recognition rather than price, warranty, and installation.



For Everyday Cash


What do you really use it for is the first question? I typically use it for lunch money at work. Usually, I bring lunch, but one or two days out of the week I’ll eat out which costs $6 on the low range and less than $10 on the high range. So,


I usually carry anywhere between $20 – $40 in my wallet at any time during the month. If you have a credit card AND are disciplined (the second part is very important), then you don’t need to carry a lot of cash. I’ve noticed that places which accept cash gas stations with really cheap prices (e.g. Free State Gas Station’s in my home state of Maryland), food merchants where you need a minimum amount of your total purchase for them to accept a credit card, some dry cleaners, or when a spouse or loved one needs some cash and you ask them why and they respond with “don’t worry about that” 🙂



Getting a Bargain Deal May Involve Paying With Cash


If you find someone selling a nice leather couch you know is worth close to $1,000 and it’s on Craigslist or Offer Up for $425 and you’ve bargained down to $400, most likely they’ll only accept cash. In this case, a special trip to the bank would be needed. If you’ve sold anything in the past on one of these sites, chances are you were only willing to accept cash too (unless you were greedy and willing to accept a check from a Nigerian business for more than 20 times the value of an item that would be sent certified mail all while providing your routing number, account number, blood type, hair sample…. ok let me stop there 🙂


Cash Usage During Travel


You may need more cash during travel because you do more things you don’t normally do when you’re not otherwise traveling. Does that make sense? Ofcourse it does. This includes things like


  • Tipping at restaurants


  • Paying for tolls


  • Snacks in vending machines


  • Other food places where you don’t have a card that allows for free foreign exchange transactions


Yes, I understand all these places are starting to take cards if they already don’t anyway. But at the same time, the cash keeps you in check in terms of how much you are spending and it’s according to the budget you originally put together. You do budget for your trips right? Oh of course you do. 🙂



Pros & Cons of Carrying Cash




  • More cognizant of your spending (psychological aspect).


  • Don’t have to reconcile to a bank or credit card statement (better hold onto that receipt if you want a paper trail though).


  • Maybe you can treat yourself. Let’s say you started out with $50 at the beginning of the month. And you only spent $25. At the same time, you didn’t use your credit card either in situations where you budget to spend using cash (e.g., my lunch example above). Well then live a little and grab a frozen coffee on a Friday afternoon like me!




  • Purse or Wallet gets stolen (hey at least they don’t have your credit cards since you’re only carrying cash).


  • If you use cash instead of a card, you may sacrifice points/rewards which can eventually add up and result in bonus cash, merchandise, miles, etc. But this can be a pro in the cash section too as people may be enticed to use their credit card more, again for frivolous things, just to get more points. This was concluded in a study in 1986 that the use of credit cards stimulates our desire to spend more in the Journal of Consumer Research, published by the Oxford University Press.



So what are your thoughts about carrying cash?  How much is too little and how much is too much?





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15 thoughts on “How Much Cash Should I Carry?

  1. I usually carry less than $100, and try not to use it. I dislike using cash for two reasons: (1) it means foregoing credit card rewards, and (2) I hate getting coins as part of the return change when I buy something. I wind up never using such coins, meaning they end up lost around the house.

    1. Coins are definitely annoying. A few months ago we went to my back and cashed in a bunch of them. And we ended up buying a toy for my son and putting the rest into his savings account. I usually try to give excess coins when paying for something so I can receive less back in change 🙂

  2. I’ve learned that when I carry too much cash, I’ll spend uncontrollably and when I don’t carry enough, then I’m never ready. $20 to $40 has been the sweet spot for me as well.

    1. I used to hide excess cash in different pockets of my wallet so as to deter me from spending it unnecessarily. Then I just figured I should carry less of it to begin with. It’s almost liberating and I only carry 1-2 credit cards too for specific uses. 🙂

      1. haha that’s awesome. When I hide money from myself, I never find it again. I’m still trying to find coins from a year ago. I like that minimalism mindset. That limits the spending thoughts.

  3. That is the question. There really isn’t a right answer, it comes down to the individual. I don’t like carrying cash. I usually only keep about $25 on hand at any given time unless I am going on vacation. Vacation spots are unknown and you don’t know what expenses may pop up that are cash only. I usually just use my card for everything though for the cash rewards. I don’t like leaving free money on the table. Just need to be more disciplined with the card since you don’t really realize what you are spending. It escalates quickly if you aren’t careful.

    1. I love the credit card rewards and like to watch the points grow over time. I usually cash out about once a year. You’re right vacations are unknown territory a bit especially if you’re traveling to another country. For things like food and shopping cash is king. But train tickets and other large items, I’ve used Capital One in the past which has zero foreign exchange fees. 🙂

  4. I carry $20 in my wallet for emergencies but use my credit card for everything. I like accumulating the points for vacations (I use a Starwood/Marriott card so we can almost always get a free hotel with points when travelling) and I hate that I lose track of cash expenses.

  5. We just got back from a short vacation and I was shocked that everyone else in our extended family brought quite a bit of cash with them. I had a grand total of $2 in my wallet from who knows what ? Our day to day shopping never puts us in a situation where we need cash so I almost never carry any.

    1. It seems like when people go on vacation, there’s this need to carry extra cash and oh my god anything can happen we need to be prepared. I don’t carry much either and know I’ll be spending more than usual so might as well get credit card points in the process 🙂

  6. I usually carry between $20 and $40, but rarely spend it. Like others have mentioned I try to use my credit card as much as possible. One reason is that we are able to get more rewards points and two, it’s easier for us to track and budget. While i agree that physiologically its harder to spend cash, i feel like we often forget how much cash we spend which makes it harder to track. Thanks for the great post!

    1. True. Since so many of us are of the accounting mindset, we like having that paper trail that credit cards offer. Also I really have to think sometimes on where did I spend the cash I had (key word “had”) in my wallet from two weeks ago 🙂

  7. I try to keep about $20 in my wallet at a time. I don’t need much more than that for what I usually buy. Although I definitely need to start carrying more cash in the future since I’ve read that it can reduce your purchases by 5%. Definitely seems worthwhile 🙂

    1. 5% could be a lot! It all depends on how easy and quickly we can reach back and pull our nice sleek credit cards that we’re able to find so quickly. But at the same time, it’s hard to sometimes find that crumbled up receipt of something we need to return 🙂

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