In today´s world of increasing disasters, both natural and manmade, it is important to understand that no matter how liquid your assets may be, it is possible that they may not be accessible. This is where an emergency stash of cash comes. You should always have cash on hand, not only for those "emergencies" when you are stuck in a small town store that doesn´t care to take credit cards, but also for those instances of being unable to access your liquid accounts.
Disasters can limit your access
Disasters that knock out power lines and result in blackouts mean that you cannot get at your checking and savings accounts. ATMs run on power, and if the ATM is shut down, and banks are closed because of a disaster, you will not have access to your money. Additionally, your credit card doesn´t do you much good when communications lines are down. Vendors can´t send the information through in such cases, and this can be a real problem if you need to buy gas. In emergency situations, the value of cash is inestimable.
How much should you have?
The amount of cash in your stash usually depends on your monthly needs. Having enough cash stashed in a safe place to get you through a month is a good idea. This is in addition to the recommended three months worth that you should have in an interest-earning savings account somewhere. If you can´t quite get that much cash out now, begin building up a stash with what you can contribute each month. Try to keep the bills small – in denominations of $20 or less. Additionally, it is always a good idea to have two or three $20 bills in an obscure compartment in your purse, wallet or pocket book. These are not meant for regular spending, but they should be saved for emergency situations when you find yourself without other means of paying.
A good place for your stash of cash
Because cash is both flammable and susceptible to water damage, it does not take a rocket scientist to realize that your cash stash should be kept in a place that is safe from both of these threats. A firebox that is also sealed against water is a good place. These are usually available at office supply stores, home improvement stores and department stores for anywhere between $35 and more than $100, depending on the size. You should also put important documents, such as birth certificates, insurance policies, Social Security cards and other irreplaceable documents in a firebox. That way everything you need when disaster strikes is in a safe place that only you can open (keep the key in a safe place you can remember, and keep it with you when you evacuate).
The other advantage to having your emergency cash stashed in a locked firebox is the fact that it is hard to get to. You do not want the temptation to dip into your emergency funds. With a little planning, you can prepare yourself to get through an emergency financially intact.