Reni Odetoyinbo was one of the millions of Canadians effected by the nationwide Rogers Communication Inc. outage on July 8.
On top of losing internet service, the 26-year-old content creator ran into banking issues when she tried to pick up groceries. Like many other retailers that day, the store she went to was only able to accept cash.
“I don’t really carry cash but thankfully I did have cash that day,” she said.
Odetoyinbo doesn’t typically store cash at home either, except for a $100 bill she received as a gift.
Given the Rogers outage, however, she plans to start keeping $100 in cash in her wallet at all times and a few hundred dollars at home. And, since some banks reported issues with ATM services, Odetoyinbo is also thinking she might want to keep some of her money with a traditional bank that has a physical location. Right now, her finances are dispersed among no-fee digital banks.
“If you were caught flatfooted without cash, you might now realize that you need to have a backup plan in place,” said Lisa Kramer, a professor of finance at the University of Toronto Mississauga.
While you don’t want to liquidate some of your retirement savings to keep under your mattress, keeping a few hundred dollars, depending on your daily expenditures, tucked away for emergencies is a good idea, Kramer said.
“Think about an emergency where telecommunication is cut off and perhaps your electricity is out. You don’t have access to emergency services. What might you need to be able to get by in that kind of situation to support yourself for a few days?”
And, when taking out cash, make sure that you have small bills, such as fives, 10s and 20s, Kramer said, in case merchants don’t have enough to give change on larger bills during cash-only and emergency situations.
Mark Cleveland, professor in the DAN Department of Management and Organizational Studies at Western University, thinks that more Canadians are going to start keeping more cash on hand, at least in the short term, because of the recent nationwide network outage.
He recommends that people have about a couple weeks worth of cash around.
“I try to always have about $200 in my wallet for anything I might need,” Cleveland said. “I try to keep two to three times that in a secure location at home just in case.”
“Going completely cashless is very risky."
Cleveland said he thinks people’s trust in the digital baking system will be eroded, at least temporarily.
"If the power goes out or if there’s a run on the banks and they have to close their doors for a few days, if there’s a cyberattack on a retailer or financial institution from hackers or on a country’s internet system from say a hostile foreign government, the digital economy may be severely affected but cash will still work.”
However, since many stores weren’t taking cash during the pandemic, people might need to get back in the habit of making sure they have some bills in their wallet.
There may also be different generational attitudes toward keeping cash on hand. Those that do have lower tolerance for unpredictability tend to be older consumers, and as a result they’re more likely to carry cash.
Younger consumers, who engage in more high-risk activities and think they’re more impervious to harm, are more likely to forgo cash and use Apple Pay and other means of digital payment, Cleveland said. They grew up with technology and are less skeptical about it, so they may not place as much priority on cash as a backup.
For people looking to change how much cash they keep at home, just keep your home insurance in mind, Kramer said.
“Home insurance often limits the amount of cash that is covered by the policy,” she explained. “In deciding how much cash to keep on hand, it’s a good idea to check the limit.”
While you can certainly keep more than the limit, just be aware that in the event of theft, only the number specified in the policy will be covered.
This report by The Canadian Press was first published July 19, 2022.
Leah Golob, The Canadian Press
