According to her, it must be acknowledged that cash still holds an important position in people’s daily lives, and the spread of digital payments does not diminish it as quickly as one might think. Data from the European Central Bank shows that nearly two-thirds of eurozone residents believe that the option to pay in cash should remain available. This position can be understood and explained by keeping money at home for short-term needs and unforeseen situations. However, cash does not work as a long-term savings tool.
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According to R. Narė, a smart benchmark for funds kept at home is an amount that would cover one week’s basic needs in cases when electronic payments are temporarily unavailable, for example, during electricity supply or communication disruptions, or when it is necessary to quickly purchase essential goods and services in an unforeseen situation.
It is advisable to keep this reserve in low denomination banknotes, such as 5, 10, or 20 euro notes. Everything above this amount is already lost profitability.
“In practice, we see that people, especially seniors, often overestimate what keeping larger sums at home provides. Our analysis shows that Lithuanian residents lose about 3–4% of their savings annually because money depreciates and earns nothing while lying unused,” says R. Narė. Data from the Bank of Lithuania shows that at the end of 2025, Lithuanian residents held about 4.4 billion euros in cash, which accounted for almost 5% of their financial assets.
A safety cushion equivalent to three months’ expenses
According to R. Narė, to ensure longer financial security, households should accumulate a reserve amount covering at least three to six months of essential expenses.
“Part of these funds can be left in an easily accessible account or savings account, but funds intended for long-term goals should be directed to solutions that help not only preserve but also grow capital,” said R. Narė, head of the Baltic States Customer Experience Improvement Center at Citadele Bank.
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One of the reasons why savings are not accumulated is fear and uncertainty about whether invested money will actually yield returns and whether it will “disappear.” However, it should be understood that there is a wide range of investment options.
Equally significant are the third-pillar pension funds. Currently, about 207 thousand residents save in them, which accounts for about 14% of economically active Lithuanian residents. Although the number of participants is growing, third-pillar saving is still not widespread, so many residents do not take advantage of long-term investment opportunities.
Inflation will not go away
There have been gradual improvements in the financial saving culture of Lithuanian residents over the past few years. However, the longer the decision to invest is postponed, the more residents lose from their future money. The economic situation is constantly changing, and the risk of inflation has recently been increasing faster than decreasing.
The most likely scenario at the moment is another ECB interest rate hike of 25 basis points, which in September would raise the deposit facility rate to 2.5%, thus creating a more attractive environment for effective saving. Therefore, the most important question is not how safe it is to keep money at home, but how to ensure that it preserves and increases its value in the future.
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