Cash management

Most people have some amount of cash on hand. This cash is more easily accessible for everyday transactions such as getting lunch during the work day or getting a morning coffee. Some people don't feel that they have to think much about the use of this cash either because it is quickly used or a person does not realize its importance. But the proper management of cash is an essential part of healthy personal finances.

Storing cash

People keep their cash in several different places. Many people hold on to a certain amount of cash and coins in order to have the money they need for everyday things such as lunch or chips from a vending machine. It is a good idea for a person not to have too much money in their wallet or purse. The easier they can get to their money, the easier it is for someone else to get to it too.

A person needs to plan how much of their cash reserve they would like to carry around with them. Some people carry around a week's worth, while others carry around enough to last them through two week's worth of cash use.

Another way for a person to store their cash reserve is in a checking account. A checking account enables a person to withdraw cash when it is needed through cashing a check or by using an ATM. It also allows people to pay bills using a check thus keeping their money safer.

A savings account is a place where many people store some of their cash reserve for certain reasons. Money in a savings account can be used for an emergency, for education, for a vacation, etc. Having a savings account, especially for emergencies, is an essential part of proper cash management. Emergencies can be a large strain on a family, but if they have a cash reserve it can help get them through.

Keeping it safe

Checking and savings accounts keep a person's cash reserves pretty safe. But there are tips that can help a person keep their money even more safe. For example, these days most people have a debit card that goes along with their checking account. While using a debit card can be much more convenient compared to always having to have the cash on hand to use, a person should be careful using their debit card. If a person were to get that number, they could use it and empty out their entire checking account.

It is safer for a person to use a credit card-instead of using their debit card-when purchasing something online. They should still spend only what they have the money for, but a credit card has a limit and the person can refute transactions that have been made by someone else who got a hold of their credit card number.

If someone is wary of carrying around cash and using their debit card, there is another option. A person can put a certain amount of money on a prepaid credit card. They can then use this card like any other credit card until they run out of money. For example, if a person generally uses $50 a week, they could put $50 on a gift card for the week and use that prepaid credit card to get lunch and to get their coffee instead of carrying around the cash or using their debit card.

Have a budget

For a person to wisely manage their cash they need a budget. A budget will allow a person to see where their money goes each month. Many people spend a lot more than they think they do each day. Buying something little here and another something little there can really add up. When a person has a good budget they will be aware of how much cash they have and decide where they want to spend it.