Despite the increasing popularity of digital payment methods like tapping, swiping, and scanning, many americans still carry physical currency. Financial planners suggest that maintaining a small amount of cash is a prudent financial habit.

according to a recent Federal Reserve survey, Americans typically keep an average of $67 in their wallets. While cash remains a common payment method, it’s usage has seen a slight decline. In 2024, 83% of consumers reported using cash at least once in the past 30 days, a decrease from 87% in 2023, according to data from the Federal Reserve.

financial planners emphasize the importance of having cash available, especially for situations where digital payments may not be feasible. These situations can include power outages,dead mobile phones,vendors with card payment minimums,or simply needing funds to get home.

How Much Cash Should You Carry?

Christopher Rand, a certified financial planner in San Diego, advises that the appropriate amount of cash to carry depends on individual routines and spending habits. He suggests keeping enough cash to cover a typical unexpected expense, such as gas, food, parking, or a tip, but not so much that its loss would cause notable concern. “Generally, $50 to $100,” he says.

Melissa Caro, a CFP in New York, follows a similar guideline, usually carrying between $60 and $80, depending on her daily plans. “If I know I’ll need it – say for tipping,parking,or certain small businesses – I’ll add a bit more to my wallet,” she says. “A good gut check is: If I lost my phone and needed a cab home, would I be covered? That’s my ‘panic point.'”

Other financial experts highlight the importance of cash during technological failures. Leslie Beck, a CFP in New Jersey, recommends keeping at least $50 in your wallet for emergencies and outages. “When Hurricane Sandy hit the NYC area, ATMs were out, internet was down in many areas, and cash was king,” she says.

Some individuals only begin carrying cash after experiencing a payment mishap. Brett Anderson, a CFP in Minnesota, admitted to carrying less than $5 before his credit card was declined due to suspected fraud.

“It’s truly inconvenient and embarrassing,depending on who you’re with,” he says. As a “financial advisor, your real friends will never let you forget if your credit card gets declined, and they take financial advice from you, I’m just saying.” He now carries a couple hundred dollars as a precaution.

“Having large amounts of cash in your wallet makes you more susceptible to losing the funds.”

The Bottom Line

Carrying a large sum of cash is generally unnecessary,and you should avoid carrying more than you can afford to lose.

Tipiwa Walker, a CFP based in California, notes that “cash simply does not have the protections that credit cards do.”

However, having around $50 can serve as a useful backup for tips, small purchases, or technical issues, even if it is rarely used, according to financial professionals.

Melissa Caro states that carrying cash isn’t about “replacing digital tools, but having just enough cash to handle those moments when tech fails or feels like overkill.”