UAE: How much cash should I hold and the dangers of holding too much

UAE: How much cash should I hold and the dangers of holding too much

Dubai: While it's often viewed as the 'safe' option, there are potential dangers in holding too much or not enough cash in hand. Knowing how much of your wealth you currently hold in cash, and how much of your wealth you should be holding in cash, are two questions with often different answers. This is why it is vital to weigh the perks and risks of holding cash and what money planners and investment experts consider is the sweet spot in how much you should hold in cash. First, the risk of not enough cash. If you don't hold sufficient cash, you can create cash flow stresses when unexpected expenses arise. The amount you should hold is dependent on your circumstances. Subject to your situation, less than 3 months of living expenses is often not enough. On the other hand, any more than 6 months' worth of your cost of living expenses or net income is often advised to not be kept in cash. There are obviously exceptions to this and some cases where it is prudent to hold even 12 months' worth, however, the norm is 3 to 6 months. So, if you need Dh7,500 to survive every month,