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This is probably one of the very first personal finance tips your parents ever gave you: always carry money with you.

While we may confuse this age-old advice with generational preference, it does have some validity. After all, there are a lot of benefits to having cash in your wallet. On the one hand, when you have to physically count money to pay for a transaction, you can get a better idea of ​​your spending.

Cash can also be useful in an emergency. For example, you might find a provider that doesn’t accept credit or maybe you have a lower limit on your credit card and in this case, cash is a reliable backup.

The big question that remains is: How do you have to take money every day?

Select spoke to a few personal finance gurus for their advice and found their answers vary from carrying as much money as you plan to spend that day to keeping less than $ 100 in your wallet. The bottom line is, like most personal finance advice, you have to decide what is best for you. (But your mom will probably sleep more easily at night if you have at least $ 20 emergency stashed in there.)

Take at least a day of spending

It’s a good idea to keep at least a day’s spending in cash, suggests Brenton Harrison, Tennessee-based CFP at Henderson Financial Group.

While this can vary depending on your daily spending habits, Harrison recommends thinking about how much money you plan to spend your normal 24 hours. This can include travel costs, such as paying for road tolls or parking fees.

Consider that some businesses – convenience stores or coffee shops – still operate cash only or may not accept certain credit cards. And as you venture further now that things are opening up again, keep in mind that money can be useful for social events.

“You might be eating with friends at a restaurant that doesn’t split checks or want to tip someone providing a service, like a barber or babysitter,” says Harrison. “Whatever your reason, having enough money to get through the day can help.”

Carry $ 100 to $ 300

Since today’s digitally driven world makes it easier than ever to pay with credit cards or with apps like Apple Pay, Venmo, and PayPal, there’s really little need for cash these days. argued Shon Anderson, an Ohio-based CFP and chief wealth strategist at Anderson Financial Strategies.

“We would recommend between $ 100 and $ 300 of cash in your wallet, but also having a reserve of around $ 1,000 in a home safe,” Anderson said. Depending on your spending habits, a few hundred dollars may or may not be enough for your daily expenses. Either way, the idea here is that you have some relief cash on hand if you have to pay for something, but can’t use a card or app.

Carry less than $ 100

“At one time, cash was king,” says Anand Talwar, head of deposits and consumer strategy for Ally Bank. “But cash is losing its luster in today’s world of unlimited digital payments.”

Talwar agrees with Harrison and Anderson, however, that it helps to have some cash in your wallet. He recommends keeping the amount equal to or less than $ 100 to serve as a budgeting tool.

“This amount gives you the psychological boost to have money in your wallet and makes you think twice about your spending,” Talwar adds.

You may also decide to pay cash when shopping at local businesses, as many prefer cash over cards to avoid the fees. It could be even more of an incentive to carry cash out of the pandemic.

Supplement your cash flow with credit

While it’s helpful to have cash on hand, a credit card is much safer than carrying a wad of dollar bills in your pocket. Plus, using a credit card responsibly (paying off your balance in full and on time each month) can help you achieve a better credit score.

Use only cash, and you’ll also miss out on the perks and rewards you can get with a credit card like cash back on certain purchases.

For example, the new Citi Custom Cash℠ card allows cardholders to earn 5% cash back on purchases in their highest qualifying spend category each billing cycle, up to the first $ 500. (then 1%).

With qualifying spending categories including everything from restaurants and grocery stores to gas stations, some travel, some transit, some streaming services, drugstores, home improvement stores, fitness clubs and live shows, there’s a good chance you’ll enjoy it every time you slide.

You can also count on no annual fees and a long interest-free introductory period with the Citi Custom Cash card: 0% APR on balance transfers and purchases for the first 15 months (after that, 13.99% at 23.99% variable APR). This can help you save extra time before the balance has to be paid off in full. Just make sure you have at least the monthly minimums and have a plan to pay off the balance before interest starts accruing.

Citi Custom Cash Custom Card

  • Awards

    5% cash back on purchases in the best eligible expense categories each billing cycle, up to the first $ 500 (then 1%); 1% unlimited cash back on all other purchases

  • Welcome bonus

    Earn $ 200 cash back after spending $ 750 on purchases in the first 3 months after opening the account. The bonus offer will be filled as 20,000 Thanks® Points, which can be redeemed for $ 200 cash back.

  • Annual subscription

  • Intro APR

    0% APR on balance transfers and purchases for the first 15 months

  • Regular APR

    13.99% to 23.99% variable

  • Balance transfer fees

    5% of each balance transfer ($ 5 minimum)

  • Foreign transaction fees

  • Credit needed

Editorial note: Any opinions, analysis, criticism or recommendations expressed in this article are the sole responsibility of the editorial staff of Select and have not been reviewed, endorsed or otherwise approved by any third party.

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