Why you should never save by keeping cash in the house

Why you should never save by keeping cash in the house

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We all know there are some people who would rather hide their money in their mattress at home than put it into a savings account. Rarely, if ever, is that the best of ideas.

Finding a safe place for your money

Set up a bank account – It is always a good idea to have a bank account set up for your everyday needs or a building society account. Opening an account is quick, easy and free at most banks (or online) you will be given all the help you need when you want to open an account as well, so don’t let it put you off if you’re unsure how to do it.

A bank account protects you in the event of fraud; allows you to make payments overseas or remotely; establishes direct debits and regular payments; and alerts you to any suspicious activity. You’ll also know that your money is safe and secure – can you really say, hand on heart, that that is the case if it’s lurking under your bed?

Granted, in the 21st Century banks have given us little reason to trust them, even if we actually own them. For that reason and perhaps an upbringing that has instilled a lack of trust in authority, some would prefer to have their money at home in a vault or a cupboard or even in multiple wallets. Keeping some cash in the house is fine, but leaving all of your life savings indoors is folly, for multiple reasons:

  • You’re not making money – taking inflation into account, over time you will lose value on your savings and you won’t earn any interest on them. That might be OK for a few months, but over an extended period of time you could lose out on hundreds or thousands of pounds.
  • It takes up space – a small consideration, but if you’ve ever seen films where huge amounts of cash are changing hands you’ll realise how bulky it is. Why take up space in the home when it’s unnecessary?
  • Theft, fire or damage – a lot of insurance policies will not cover any money left in the house and if they do it will only cover a very small amount. If you don’t have contents insurance, then none of it will be covered.
  • Forgetfulness – It sounds crazy, but people fail to recall where their money is in a home. They forget exactly which case or box it is in, especially if they’ve moved house or if they keep money in multiple locations in different rooms. An unfortunate by-product of this is that sometimes an old case can be thrown away, without a check on its contents…
  • Security – a bank is one of the safest places for you to keep your money because putting money into UK bank accounts or building societies means that it is protected by the Financial Services Compensations Scheme (FSCS). This means that FSCS can pay compensations a firm is unavailable to do so. This scheme covers, deposits, insurance policies, insurance brokering, investments and mortgages.

The FSCS’s saving protection limit is £85,000 or £170,000 for joint accounts and this is per authorised firm. If you do have more than that limit within the same bank account or authorised firm, then it will be a good idea for you to move the excess to make sure that your money is protected.

Naomi Isted
Editor in Chief, Naomi Isted is known as The Ultimate Lifestylist to her readers and viewers. She is a TV Presenter and Columnist. Ranked in the Top 100 LFW Social Media Influencers AW14 & SS15, Brand Ambassador for Pears Soap UK. Her Celebrity beauty TV Series currently airs to 27million homes on Physique TV in UAE, previously on Wedding TV in the UK. She brings fashion and beauty advice to her readers and viewers on a daily basis. She is Fashion and Beauty Columnist for Herald Scotland and has a Fashion and Beauty Bridal Blog for HELLO. She can usually be found attending celebrity fashion and beauty events in and around London and sharing the latest fashion and beauty trends with her readers.

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