These are strange times. The global COVID-19 pandemic has caused long-term uncertainty worldwide. It has brought into focus the need for being prepared, be it for a weather disaster or a financial one, making sure that your family is prepared can mean the difference between running out of toilet paper or being prepared for emergencies.
Most emergency preparedness experts recommend that people have an emergency kit in their homes with things they would need to survive for at least a few days. This kit should include things such as non-perishable food, water, a first aid kit, and emergency supplies such as a flashlight, tools, and a portable radio.
Additionally, one of the most important things to have in an emergency situation is cash. TheSimplePrepper, an online emergency preparation site, rightfully asks the question, “what would happen in the event of a true emergency like a wide-spread power outage after a hurricane, tornado, winter storm, pandemic, nuclear disaster (and many more)?”
Without power the ability to access cash or pay for goods electronically simply isn’t possible. However, as TheSimplePrepper writes, “If you had cash on hand, however, you’d be set. You could buy what you need to survive or pay for enough fuel for your car so you can evacuate in an emergency.”
How Much Cash do You Need?
How much cash on hand each person or family will need in case of an emergency, varies depending on the person. It’s not a one-size-fits-all solution. Money expert Clark Howard states, “It depends on daily cash needs. Figure you need to cover three days of ‘walking around’ money. Whatever you would typically charge or use a debit card for over a three day period, that’s what you need to have on hand.”
To find this amount, Clark suggests:
- Look at a month from the last year in which you didn’t have any large, out-of-the-ordinary expenditures.
- Add together your total credit and debit card expenditures, plus any money you withdrew from ATMs that month.
- Divide that number by 10 and, voila, you have a pretty good idea of how much cash you might need to cover you for three days.
One thing to keep in mind is that in an emergency, many businesses will not be able to break large bills. So, it’s best to make sure that your emergency cash supply is in smaller denominations: $20s, $10s, $5s, and $1s are best.
Where to Stash the Cash
While it might have been a good idea long ago to store your emergency cash under the mattress, that’s certainly not the case nowadays.
According to The Motley Fool, “The best place to keep cash at home is a concealed fireproof and waterproof container such as a lockbox or safe. Safes are more secure, especially if you have one that’s bolted to the floor or too heavy to move, but heavy-duty safes can also be exceedingly expensive. A lockbox or small safe tucked away in a discreet location can be nearly as secure and a whole lot cheaper.”
Alternatively, you can store money in your emergency kit inside a fireproof and water resistant document holder.However you choose to store your money, it’s a great idea to head out to your local ATM to stock up on cash-on-hand in case of an emergency situation.