How does the precautionary motive for holding money relate to the liquidity preference theory in the context of real interest rates?

The precautionary motive for holding money means that people want to keep some cash on hand for unexpected expenses, like medical bills or car repairs. This is related to liquidity preference theory, which suggests that people prefer to hold money that is easily accessible rather than investing it in things that might take time to convert back into cash. When real interest rates are low, holding money is less costly because the opportunity to earn interest on savings is reduced, making it more appealing to keep cash for emergencies. For example, if a person knows they might need to pay for a sudden car repair, they might choose to hold onto more cash instead of putting it in a savings account where it could earn a little interest. Therefore, the precautionary motive leads people to demand more money when real interest rates are low, as they prioritize being ready for unforeseen costs.