Thursday, January 14, 2010

Keeping cash at home

Something I've been thinking about a lot lately is keeping cash at home.  This is a really important aspect of preparedness because there are several situation where cash might be the only option for purchasing things.

For example, when a natural disaster hits, it's almost inevitable that electricity will be down, perhaps for several days.  Credit cards and debit cards will be of little use, and it won't really matter how much money you have in the bank because you won't be able to access it.

There are other reasons to have cash at home.  In December, one of my mother-in-law's employees had her purse stolen.  Within hours, the thief had spent hundreds of dollars at a department store.  This employee had to then put a "freeze" on all her accounts - her savings account, credit cards, debit, and checking - to ensure that no more money would be stolen.  The freeze lasted 10 days, during which time she had to wait for all new credit/debit cards to be sent to her, as well as new checks with new banking numbers.  The worst part is, this was all before Christmas, when she needed to be buying gifts for her children.  She also needed to pay her bills, but unfortunately she had no way of doing either.

So how much cash should you keep?  It depends on the size of your family, and what kind of natural disasters could occur in your area.  I grew up in New England, where deadly ice storms could shut down towns for weeks.  I don't think it's too crazy to say that you should keep several hundred dollars in your house - maybe more.

In the past, people may have balked at the idea of taking money out of a bank and keeping it in their homes - think about the interest they would lose!  However, I think it's safe to say that your money isn't making much money these days, so you might as well have a chunk of it at home.

Another thing to consider is where to keep it - obviously a fireproof, waterproof safe would be ideal.

How much cash per person do you keep at home (if you don't mind sharing!)?  Does anyone have any stories about when they wished they had a cash reserve at home?  Stories about using yours?


Svedi Pie said...

No stories, but just another comment or two. One important thing is that the cash is in small bills (1's 5's 10's - don't keep emergency cash in 50's and 100's that will be almost as ineffective as a debit or credit card).

As for an amount we actually have a pretty large amount in cash in our home. I would say you probably would want at least $100 per person in cash (just thinking of it was for an extended period of time).

Although I was reading about the quake in Haiti and one comment I read was ""Money is worth nothing right now, water is the currency."



Anonymous said...

I have two kinds of emergency cash at home: 1) about $100 for just misc things that happen/kids need short term money 2) THE emergency cash of $1000 in case of evacutation/natural disaster etc.

Peace of mind is worth the lost interest.

Anonymous said...

We have 100 in each 72 hour kit. I have a roll or quarters in there too. You can put the roll of quarters in a sock and swing it around as a weapon if needed. Of course it is in small bills (nothing more then a $10). I also have $100 in the car kit which can be used for gas if needed in a pinch.

With all that has happened in the banking system this past year - I continually am amazed at how they "cheat" the people by how they take out the money in you ledger. I watch it daily on-line. It has made me extremely cautious that I am cashing my checks and using the envelope method of paying bills (with money orders). I've gone to almost always having cash to pay for bills and savings. I am trying to wean myself off any type of credit/debit or checks.. I am working with cash. It is actually making me save more when I see it as actual cash.

Coordination Queen said...

Funny you should post this today. I dropped my car off at the shop to be fixed and was going to be stuck driving 3 kids and a husband around in a jetta for the next few days. My mom was kind enough to switch cars with me. On my way to drop my daughter off at dance, the low gas light came on saying I had 20 miles until it was empty. Couldn't find my purse. So I drove home. Couldn't find my purse. I called my mom, oops, I left it there 20 miles and 30 minutes away. So I was scrounging all around the house looking for any kind of money to buy some gas. I resorted to the bowl of change on the dresser and found $9. I'm going to pull some money out of the savings account next week and keep it on hand, just in case.

Anonymous said...

We keep $2,000 in a safe, and $200 in each of our packs for a family of six in a major metro area.

Anonymous said...

Um, I meant $200 each in TWO packs (not all six, for goodness sake!).

Anonymous said...

A while back, I lost my wallet and we had to close accounts and wait for new cards. My husband was leaving on a trip and would not have any credit cards to take with him. We couldn't cash a check for him either because I lost my wallet Saturday evening and he was leaving on Sunday - no banks were open. The perfect storm! :) We scrambled and came up with a small amount of cash to send with him. The poor guy ended up skipping a meal or two to make the money last while he was gone. It was crazy!

Now we use the envelope system so there is always cash somewhere and we are building a reserve which we would like to reach several hundred dollars ( maybe $400-500). Thanks for the great post. It's worth it to have some cash on hand!

Rebecca Hauptman said...

I think this is a great reminder... and some great comments have been made. The first one about how in a natural disaster situation like Haiti, money is worthless... well, in that situation, sure, I agree!! I think that we should all have our focus on food and water (and emergency) storage for that caliber of disaster. Hopefully we won't ever have to use it.

But for everyday emergencies, it is nice to have cash on hand. I rarely do. We have a change jar (one of those plastic 5 gallon water bottles) that probably has close to $800 in it but what good would that do? We need to start getting out some cash from our savings account and storing it in our safe. This is a good reminder for us. I never have cash on me. If I do, it never lasts long. I do everything electronically.

I couldn't imagine using the envelope system, as some people have suggested. That would mean I would have to actually go to the store and shop, and I do most of my stuff online and have it delivered. (A local farmer delivers raw milk, organic meats, butter, eggs), a grocery delivery service usually has the rest delivered to me, my bottled water company delivers the water... so it wouldn't suffice for me. I just wouldn't be able to sustain a life like that. I don't have time to shop.

Cindy said...

This is a great reminder. We do have some cash on hand but I think we need to convert it to smaller bills. I'm not willing to give someone a $20 for $5 worth of food or gas because they can't make change.

Anonymous said...

One of the biggest reminders is to NOT tell people how much cash you have put away or it's location - in the house, BOB, car for any reason. Sure it sounds paranoid but why put the info out there in the first place? During the Y2k scare I knew of two people in my area who searched the internet for people posting what they have stored - just to pay them a visit post-tshtf and relieve them of their stuff.

Personally I keep it to a months worth of wages in a secure spot and always keep enough for at least a half tank full of fuel in the BOB in small bills. It's also good to keep at least $10-20 worth of pennies, nickles and dimes around because most people won't be making change and will round it up to the next dollar.

Anonymous said...

As the LDS General Authorities have suggested, we try to keep a good reserve in the bank. But for at home, just the equivalent of about two weeks of grocery and fuel budgets is good for us. If there were a natural disaster that wiped out the power, everyone in our town would be in the same boat and no one would be able to pay their bills until the banks were back online. We used to keep more cash on hand, but it was too tempting. When it is in the bank, it is out of sight, out of mind, there when we need it.

Thoughts of THAT mom said...

I always have what I call my "emergency $20" on hand. We keep one in the car in a hidden location, I have one in my purse, DH has one in his wallet, & my oldest has one in her purse.

When we lived in an older-mindset community, that "emergency" money saved us more than once when we encountered a business that didn't take credit (we don't use checks).

We lost access to our bank for 2 weeks at Christmas time 2 years ago during the massive ice storm in the midwest. We were safely out of the way of the ice storm, but our credit union several states away wasn't. That taught us to have cash at home to cover gas for a period of time. We also opened an emergency account with a local bank & keep $1000 in there. We have enough of a food stockpile that $100 plus our $20s gives us enough to get us through for gas.

Unknown said...

When we got married in June 2009 he wanted me to close my BB&T a/c and move to his credit union. While I was waffling, a company made a charge that was canceled the year before. I check my online a/c twice a day, before open and after close.

I had 5 pending charges on monday. Friday this charge happens! Those should have gone thru by thurs. I got hit for $170 in over-draft charges! They held up the smaller charges for the large charge to hit me with 5 o/d's!

Called large one, proved (CYAWP - cover your butt with paper!) it was THEIR mistake, had a revers. Then spent the next 2 months getting BB&T to credit me.

So, I move to hubby's credit union. Took me 3 mos to get marriage license to change SS card, which took another 2 months to get.

Late Nov I'm trying to change everything to married name. I lose my wallet, canceled debit card (2 c/c to pay off then DONE!). January, I still haven't gotten my replacement card. Finally call, no one told them I canceled it. Deep breath, okay send me a new one.

I FINALLY get my card on Jan 28. I try to follow the enclosed letter to activate. It's the SAME c/c number that was canceled! They sent me a card in married name that was canceled.

I went ballisitc! Made the 3 hour drive to nearest office, and proceeded to make my unhappiness obvious at the officer's desk (I'm Irish & Hungarian Gypsy, we are NOT quiet!). I am told I will be issued a BRAND new card with pin. In 7-10 business days.

It's a good thing I'm unemployed. Else I would have been w/o money since late Nov/early Dec!

I keep money, cash and gold & silver coin on hand for any emergency.

I hate banks!

Anonymous said...

I wouldn't worry about losing interest by not having money in a savings account - they're barely paying any interest at all now. One other thing to consider is old fashioned travelers checks. They should last forever, and they're safe - replaceable if stolen. They're useful as a backup when traveling. I insisted my 18 year old son take some when he ventured to Europe on his own for the first time. Yep, when Plan A (get cash from ATM with debit card) wouldn't work, he went to Plan B (cash traveler's check). He had a Plan C and Plan D, too, at my insistence. Problems (at home and traveling) always crop up when it's the most inconvenient to handle them. My biggest problem, in middle age, is remembering where I hid the extra cash for safekeeping!

ahnn said...

I enjoyed reading your post. I been thinking about keeping cash right now. This is really something to think about.

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