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Should You Keep “Emergency Cash” At Home?

5 March 2010 12 Comments

Everybody believes in an emergency fund, but what if you couldn’t get access to such funds in an emergency?  There are many possible scenarios that could occur and prevent you from having funds needed in an emergency.  As such, I believe you should keep some cash hidden at home for use in an emergency.

In the event of a major disaster or blow to “the system”, you could easily see one or more of the following situations occur:

  1. Bank failures which could delay withdrawal of your money while the FDIC sorts out the mess – If the FDIC goes under, it will be even more messy (unlikely due to the printing press)
  2. Power outages – disable ATMs, online banking, computer systems needed to access funds
  3. In such a disaster, vendors and retailers will likely not accept credit cards either, even if they’re capable of processing them.  You will likely need cash.

We heard in 2008 all kinds of threats about total financial system collapse.  Not sure exactly how that would play out but it likely wouldn’t be good for your access to cash.

So, how much cash should you keep on hand?  Most people say you need 3-6 months in an emergency fund, some say even up to a year.  For probably 99% of people, that emergency fund is a savings account somewhere which means you’re reliant on a functioning banking system to gain access to that money.  While, it’s unlikely that you would actually lose that money, the scenarios outlined above could definitely disrupt or delay your access to funds.

To get through a potential disruption or delay, you should consider keeping 10% of your emergency fund (or more depending on your situation) in cash at your property.

Keeping cash on your property of course comes with several risks, namely theft.  I recommend keeping cash hidden in multiple places.  A small safe that is visible is not a wise choice as thieves can simply remove the safe and take it with them.  Be sure to consider other risks such as fire as well.

In conclusion, if you’re truly planning financially for emergencies, then it makes complete sense to have at least some chunk of cash on hand at your house to get your through a disruption to the financial system or the regular day-to-day workings of the economy.  I’d recommend at least $500 and maybe up to 10% of your typical emergency fund in cash at your house.


  • Kyle C. said:

    That is one of those things people don't really think of but having some cash around is certainly going to help you out. Think about the people in Chile and Haiti where earthquakes leveled everything. Odds are the banks weren't open the next day for you to withdraw some cash.

  • bob said:

    You need to look at your homeowners insurance, because the majority of plans only cover a very small amount of cash (around $200). Not very much…

  • 20smoney said:

    Yes, there is definitely risk with keeping cash at home, but even keeping $500 or so at home might be a good idea if a major emergency occurs. If your house explodes, you might lose that $500 though 🙂

    Yeah, I'm not saying you should keep like $5,000 at home or anything, altho maybe some people do?

  • LeanLifeCoach said:

    We lived in California for a time. While we were not impacted the quake at Northridge changed our opinion about keeping cash on hand. In a Haiti like situation gold is not as valuable as cold hard cash!

  • Ken said:

    Yeah maybe a couple hundred dollars at the max.

  • G.Patterson said:

    A few hundred bucks may be all that you would need. Just enough to cover the basic necessities for two weeks at the max.

  • Jason @ M$M said:

    I agree, a couple hundred max. If you need more than that, odds are the economy has collapsed along with those banks, and it won't matter anyway!

  • Ghodna said:

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  • andy said:

    enought to live for 2 months

  • Dillard said:

    Even cash is not worth much if the stores are MT in a day or two. A several day supply of food and water is worth even more than silver or gold. It could be that your utilities could go down for several days. Sad but true.

  • John Reilly said:

    A fire proof safe built into the wall or floor is a great idea. More people today are doing this. Professional safe’s for jewelry and money run about $5000.00. Buying a safe at Staples will do nothing for you and really aren’t safe’s, just something for a thief or some worker in your house to steal. Cash in a safe deposit box is a good idea too.

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