Savings 101: The Mattress Money
Let’s talk about the Mattress Money. You know what I am referring to — the stash of $50’s and $100’s you have shoved under the mattress? In a shoebox behind the suitcases in the walk-in closet? Under a loose slat in the floorboards? Taped under the middle drawer of the chest of drawers ? No matter where it is, for the purpose this blog, let’s call it Mattress Money.
The ‘Why’ Behind Stashing Cash
We all do it, but why? According to a survey by American Express, 1 out 4 consumers expect a financial emergency of some kind and keeping cash at home seems like the safest bet for quick access to the money. Some people fear a banking crisis, think back to 2008, so they no longer trust their local bank.
Move the Money to the Bank — Pronto!
There is a huge chance for disaster if your primary savings are stowed away at home somewhere. Firstly, if this same money was in a savings or checkings account it would have loss protection as they are FDIC-insured. Money hidden in the freezer is at-risk for theft or loss due to fire or a natural disaster. There have been stories of mattresses full of life savings being thrown away by unknowing relatives or a suit being donated with more than $10,000 rolled away in the pockets.
It is highly recommended that you move any stowed-away cash above $1,000 to a FDIC-insured bank account. Savings or checking accounts opened in Federal Deposit Insurance Corporation — insured bank are saved from loss of deposits if the insured bank fails. The insurance is backed by the full faith and credit of the United States Government and has been in operation since 1934. It was created in response to the thousands of bank failures that took place in the 1920’s and 1930’s across the United States of America; what historians also refer to as The Great Depression.
FDIC covers the following: Checking Accounts, Savings Accounts, Money Market Deposit Accounts (MMDA), Negotiable Order of Withdrawal (NOW) Accounts, Time Deposits such as Certificates of Deposit (CDs), and Cashier’s checks, money order & other such items issued by a bank. The standard deposit insurance is for $250,000 per person per insured bank.
Stuck on the Shoebox?
Keeping some money at home, in case the ATMs are emptied on New Year’s Eve is not a bad idea. However, be sure to keep it somewhere unexpected; thieves are quite familiar with the popular hiding spots! Also, let at least one other person know so the chances of accidental disposal are reduced.