It is relatively common to reserve certain amounts of our savings at home so that, in case of emergencies, we can quickly make use of them outside of telematic payment methods. It is what is known as keeping cash ‘under the mattress’, a legal practice, which can be done without problems and which entails certain risks.
Keeping cash ‘under the mattress’ is a citizen’s decision. Of course, from the first moment he starts to store certain amounts of money at home, he becomes the guarantor of the security of that cash that was previously in the bank. It is the price to pay for having that money nearby.
But not only that: when storing money at home, citizens must know that they not only have to take care of their security, since to that they must add that they have to give up obtaining certain returns for it. It is another of the opportunity costs (that is, what is given up when making a decision) of keeping cash in our home.
He has put together a list of potential threats to be aware of when keeping some of your cash ‘under the mattress’ at home. They are the following:
Inflation
It is on everyone’s lips and it is not for less. Currently the Consumer Price Index (CPI) and although it shows signs of slowing down, inflation continues to run wild due to the influence of food prices. This has consequences on daily spending or bills, but also on the money we store at home.
The reason is simple: the money we keep at a given time will lose value as inflation increases. To understand it, a very simple example suffices. If we keep 50 euros at home and use it the following year, we will probably buy less food or products in a supermarket than the previous year. Or what is the same, those 50 euros will have lost some value.
At HelpMyCash they recommend fighting against what they call a ‘silent enemy’. To avoid problems derived from inflation, it is advisable to choose to deposit the money in a fixed term or even invest.
Tax authorities
It is not exactly a risk, but it is a threat if the citizen does not take the appropriate steps. The money that is withdrawn from the bank account and kept at home must be correctly declared through the Treasury Declaration that pays the Personal Income Tax (IRPF).
The key is to be able to prove the origin of the money to be sure in the face of possible questions from the Treasury if you later want to re-enter the money into the bank account. At HelpMyCash they bet on saving income statements, copies of payroll…
Thefts and natural disasters
Keeping money ‘under the mattress’ means taking care of it, as mentioned above. That is why one of the threats that endangers this money is that of theft or natural disasters, contingencies that affect all the assets of a home.
A robbery in our house, a fire, a flood…these are events that are beyond our control but that can happen and take away the money saved and kept ‘under the mattress’. Surveillance systems, contracting insurance or even fireproof safes are some of the alternatives that HelpMyCash recommends.
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