how to handle cash
July 7, 2011 4:45 PM   Subscribe

what is the smartest way to save cash?

Let's say you have a job where you get tips, a waiter; you don't need the extra cash to pay bills so you decide to save all this cash for rainy days; how do you do it? Do you throw it on a drawer? I just find awkward having 20K in cash after a year or 2... What is the best way to do this? buy bonds every 3 months? I need ideas about how you would handle the cash on a safe, logic and smart way.
posted by 3dd to Work & Money (16 answers total) 7 users marked this as a favorite
Interest bearing checking or savings account?
posted by Ideefixe at 4:48 PM on July 7, 2011

Unless you're concerned with being audited, wouldn't opening a savings account and making regular deposits via ATM in well-lit area be the clear winner?

Supposing that solution wouldn't work for whatever reason; gold purchased directly is a good way to consolidate cash into easy to store object, just be sure to get a good safe / hiding spot.
posted by oblio_one at 4:48 PM on July 7, 2011

The first two answers are good depending on which way you want to go. There aren't a lot of complicated options here. Put it in a bank or stash it (or convert it and stash that).

If you opt for the latter, jar-under-the-porch route, buy a fire safe. Your stash is worthless if it's all burned up. They're pretty inexpensive for the smaller, suit-case sized ones, but those are also portable (hence the good hiding spot mentioned above). You can also keep valuable documents, photos, etc., in there. A bigger gun safe that provides fire protection is about a thousand bucks, way too big for your purpose, and really valuable only in that it's not portable without tools and a handcart. Go to the crazy gold-bug sites and see how/where people hide their stuff.
posted by resurrexit at 5:15 PM on July 7, 2011 [3 favorites]

Safety deposit box at your local bank.
posted by ThatCanadianGirl at 5:36 PM on July 7, 2011 [1 favorite]

Consider getting an individual IRA or Roth IRA if you are paying taxes (declaring) on it. If you are not declaring it consider getting an IRA or Roth IRA and declare it as income. A bank can help you with this. There are a cariety of reasons why it is a good idea (though painful in the short run) to declare income. But that is notwhat you asked
posted by rmhsinc at 5:54 PM on July 7, 2011

You don't say if you have a checking account or if you pay bills with money orders or in person (?). If you have a checking account you could deposit the cash there and periodically, when you're sure it's extra, send it to an ING or a Fidelity or Vanguard money market. I find the harder it is to get to the money the easier it is to keep it "saved". And the interest rates on non-brick and mortar institutions are usually a little better. My 2 cents.
posted by forthright at 6:07 PM on July 7, 2011

Best answer: I would use the cash to make as many payments as possible and transfer a corresponding amount of my official earnings into some kind of savings account.
posted by any portmanteau in a storm at 6:09 PM on July 7, 2011 [3 favorites]

Keeping lots of cash on hand is a sure-fire way to get robbed and shot. Don't do it.

And, yes. I used to work in a warehouse district, where lots of the businesses operated on a cash basis. Eventually, it becomes hard to keep this under wraps, and there were occasionally extremely violent incidents. Nobody ever seemed to learn from it, as cheating on their taxes was evidently more important to them than not being shot.

Don't keep too much cash on hand. Just declare your fucking income to the IRS. If you're making little enough money to worry about this, your tax burden is going to be close to nil anyway.

posted by schmod at 6:24 PM on July 7, 2011

Obviously putting 75% in a high interest bearing money market account and 25% in stocks or investment accounts like Roth IRAs (etc, etc, etc, etc, etc, etc) is the way to go.
posted by carlh at 6:31 PM on July 7, 2011

Best answer: If you're a US citizen, consider series I savings bonds.
posted by monstrouspudding at 6:39 PM on July 7, 2011

Safety deposit box at your local bank.

That's 100% insane. The smartest thing to do with cash is to turn it into something that isn't cash ASAP. The 75% money-market, 25% diversified portolio option is a good one.
posted by mhoye at 6:42 PM on July 7, 2011

Response by poster: The idea was keep the cash away from the bank and pay everything with 'official income' from checking account, but I guess that is not the best option. Thanks everyone!
posted by 3dd at 6:42 PM on July 7, 2011

If you are with a company that does matching on your retirement benefit, that's free money coming in right there.
posted by Ys at 7:45 PM on July 7, 2011

You do realize there can be criminal penalties for not declaring income and paying taxes on it, right?

"You may be subject to criminal prosecution (brought to trial) for actions such as:
Tax evasion,
Willful failure to file a return, supply information, or pay any tax due,
Fraud and false statements, or
Preparing and filing a fraudulent return. "
From here.

So a "safe, logic and smart way" would be to pay your taxes on it, and then put the rest into a savings/retirement account.
posted by Grither at 4:34 AM on July 8, 2011 [2 favorites]

OMG I was a waitress for many many many years and the IRS is *NOT* going to come knocking on your door to see if you have 'undeclared cash' on hand. Grither is a wee bit paranoid for sure. Seriously, the gov't has more to do than that

I always paid my bills with my check, and used my cash for day to day purchases like groceries, gas, clothing, eating out etc. If I wanted to pay bills with it I would just buy a money order, so my tips were never in a bank ever
posted by Frosted Cactus at 8:50 AM on July 8, 2011

The idea was keep the cash away from the bank and pay everything with 'official income' from checking account

This doesn't make sense to me -- what kind of checks do you mean? Aren't they from a bank? How are you using checks if they're not from a bank or a credit union?

Also agree with mhoye, using a safe deposit box at the bank to store a waiter's tips would be idiotic.
posted by Rash at 9:15 AM on July 8, 2011

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