Wednesday, October 1, 2008

Money in Your Mattress? Bad Idea!

It is natural for people to be worried with the doom and gloom financial news coming at us from every media outlet. You might be asking yourself if your money is safe. Some people are even withdrawing large chunks of cash from the bank and hiding it away in their homes.

I'm here to tell you now--it is a bad idea. Money hidden in your house, whether in a wall, buried in the back yard or stuffed in or under the bed, is vulnerable to theft, fire, and forgetfulness.

Forgetfulness? That's right. It is not uncommon for people to hide money and then forget about it. A couple of times a year there will be a story of people discovering long lost boxes or jars of cash, sometimes from the 1920s and 1930s.

Think about how poor many people were in the 1930s. Do you really think the person meant to leave that money behind to be discovered by someone else in the year 2008? No, the person who put it there forgot where it was or died without telling his heirs.

There was a story just the other day about $1500. It seems a man was cleaning out his sister's house. He hired a junk company to come take away the bed. It is only because the company's employees were honest that he was told that when they tore apart the bed that they discovered money.

It seems that this wasn't the only money his sister hid, fearing the banks would not be safe. However, how safe was her bed? The money was almost thrown away or taken by others. This loss never would have made the news; the money would just be gone.

What should we learn from this? Yes, the news about our economy is bad, but the solution does not lie in your mattress. Instead, learn about the FDIC and NCUA guarantees. Make sure that you do not have more money in any one bank than will be covered by the insurance. Check to make sure that each investment or account you have is as safe as it can be.

You can make sure you have a little bit of extra cash on hand, just in case of emergencies, but resist the urge to hide your cash. The banks may not seem safe, but they are a lot safer than hiding your hard earned money in a hole in the back yard.

Personal Finance Blogs I like:
The Simple Dollar
Wise Bread
Get Rich Slowly

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