In a time when savings accounts once offered virtually no interest earned, people are still wary of anything but the safest stock options. Even CDs provide a dismal return unless you promise to lock away your investment for a lifetime. Is it any wonder why some savers go old school? They hide money in a secret spot in their homes.
Going to the Mattresses
During the Great Depression (and for centuries prior), hiding money under mattresses, in sock drawers, or in other hiding places around the house was perfectly normal. After all, before FDIC security was in place, if a bank went under, your cash went with it!
Fortunately, your money is now reasonably safe if it’s kept in a bank account. Credit cards and debit cards are pretty reliable in general. However, many Americans are reverting back to more traditional methods to keep money safe. This is happening even, as confirmed by increased holiday spending, the FDIC reports that people do trust banks more.
But what about those households that are fed up with financial institutions in the first place? According to CBS News, More than 28 million people in the U.S. forgo traditional financial institutions. “Often this is because of mistrust, cultural and language barriers or a belief that by the time all the bills are paid, there will be nothing left for an account.”
Why We Hide Money at Home— and Why It Works
It’s not unusual to distrust financial institutions, even after the Great Recession many years ago. Many baby boomers lost their entire retirement savings, forcing them back to work, for good in many cases.
According to the AARP’s Public Policy Institute Report, “The Great Recession drove millions of older Americans to deplete savings accounts, put off medical or dental treatment and reduce their retirement expectations.” No wonder many of them pulled their savings/checking accounts and made their own nest egg right at home.
There’s definitely an upside to having emergency money at the ready, as long as it’s stored safely. Obviously, hoarding a few hundreds under the bed isn’t secure since bedrooms are the first stop for savvy burglars and thieves. However, a fireproof safe that’s unbreakable and bolted into place (as well as hidden) is a good place to hide cash. If “home savings” is done well, it can be relatively safe. Just don’t put your entire nest egg in your humble abode or make it the cornerstone of your personal financeplans. Unfortunately, the vast majority of “mattress stuffers” don’t spring for the most effective protection.
The Downside to What’s Under the Bed
There are many threats to hiding away money at home that don’t exist in financial institutions. Break-ins, fires, natural disasters and even forgetting where you put hidden cash, are more common than you think. The cost of a fireproof safe and the price of installing it properly is enough to turn off many homeowners. They think they’re “saving” by hiding cash in Ziploc bags around the home (even buried in the yard), but there are many cases of new homeowners discovering treasure troves old tenants forgot.
Overall, it’s still a bad idea at the end of the day.
Hiding money at home will always be “a thing,” especially for older Americans. Even millennials may take up the practice as we face financial turbulence in the years ahead.
Those with barriers to traditional banking, or anyone who’s been burned financially may keep a lot of cash at home. If a financial institution just isn’t an option, play it smart and invest in security at home just in case. Anything less and you’re gambling on your financial future.
FAQs
"Hiding money under the mattress" is a classic way of describing someone who is thrifty. However, economists argue that literally putting money in your mattress would cause you to lose money in the long run.
Where are people most likely to hide money? ›
Where Americans Hide Their Cash
- In a safe: 63.3%
- Inside the refrigerator: 13.3%
- In a suitcase: 6.1%
- In a closet: 5%
- In a water tank: 4%
“Some common places for hiding valuables are behind wallpaper, inside couch and chair cushions, or behind loose bricks around fireplaces. People also like to hide valuables under steps, siding, and shingles.”
Why did people then hide the money in their own houses instead of putting it in the bank? ›
The main reason people hid money during the Great Depression was that they no longer trusted banks. Many banks floundered and failed during this time, and people lost their money. In the 1930s, banks were not FDIC-insured, so they took investments with them when they failed.
Is it good to keep money under bed? ›
If you want to build or maintain a healthy financial life, then keeping your money in your mattress is probably not the best place to start. Budgeting however, should be your fundamental starting point. After all, how can you tell you're on track if you don't know where your hard-earned pay-cheque is going?
How many people keep money under their mattress? ›
A little less than 20 percent of Americans hide cash in a sock drawer, while 11 percent put it under the mattress and 10 percent secure it in a cookie jar. Another 9 percent keep their cash somewhere else in the house.
Where do millionaires hide their money? ›
Real estate
And in a 1 percenter world, penthouses and waterfront mansions can help protect or launder your fortune. A recent Times investigation into one Manhattan property found that more than 200 shell companies had purchased units in the building, including corporate fronts for 17 billionaires—and Tom Brady.
Where is the safest place to keep cash at home? ›
Where to safely keep cash at home. Just like any other piece of paper, cash can get lost, wet or burned. Consider buying a fireproof and waterproof safe for your home. It's also useful for storing other valuables in your home such as jewelry and important personal documents.
Where do hoarders hide their money? ›
Check in unlikely places, like the backs of picture frames, inside books, throughout closets and in refrigerators and freezers for hidden cash or valuables. - Document cash and any possible valuables such as jewelry or art that you find.
What do old people do when they don't have money? ›
Aging adults without the benefit of family support might consider returning to work. Studies show that people over 55 are the most successful at gig work, with one-third of gig workers being retirees. Seniors with the right skills can take advantage of the gig economy and find lucrative opportunities.
Aside from the master bedroom, the office or study is one of the first places burglars check for valuables. Like the living room, some people have the habit of displaying valuables in their study shelves or office.
Why do some people hide money? ›
People hide money and income to evade creditors, dodge judgments, avoid taxes and conceal criminal activity.
How much money can I keep in my bank account without tax? ›
There is no specific limit or threshold that would cause the IRS to tax it. That being said, ant cash deposits of $10,000 or more would be reported by the bank in a Currency Transaction Report (CTR) to FinCEN, an arm of the Treasury Department.
Why not to keep cash in the bank? ›
Keeping too much of your money in savings could mean missing out on the chance to earn higher returns elsewhere. It's also important to keep FDIC limits in mind. Anything over $250,000 in savings may not be protected in the rare event that your bank fails.
How much money should I have in cash at home? ›
In addition to keeping funds in a bank account, you should also keep between $100 and $300 cash in your wallet and about $1,000 in a safe at home for unexpected expenses. Everything starts with your budget. If you don't budget correctly, you don't know how much you need to keep in your bank account.
Why is it not a good idea to save money under the mattress at home? ›
Although some people hold the outdated idea of stashing money under the mattress, hiding cash in the house isn't always the best solution. This is not only because of the risk of theft but also because you rob yourself of the opportunity to earn interest.
What happens when you put money under your pillow? ›
There is no scientific evidence to support the claim that putting coins under your pillow at night has any benefits. It is a traditional practice that is often associated with the belief that it can bring good luck or financial prosperity. However, there is no scientific basis for these claims.
What should be kept under the bed? ›
Vacuum sealed bags are a great solution for under-bed storage, Kilgore says. “If the storage will be seen, use some baskets, and store items in vacuum-sealed bags in the baskets,” she says. These bags are best for clothing and seasonal items, like sweaters as well as extra bedding and towels.
What does it mean to make money while you sleep? ›
At the end of the day, making money while you sleep is just another term for passive income. It simply pertains to money that comes in every month automatically, without very much maintenance required. Most people think about real estate rental income as passive income. But, there are so many other forms.
