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Keeping Cash on Hand for Emergencies

The earthquake in Japan scared the crap out of me, and I was simply sitting in the comfort of my home nearly 5,000 miles away. I would find myself up late at night watching video clips on CNN over and over again thinking, "Did this really just happen?"

The footage looked like something straight out of an apocalyptic movie. Really scary stuff!

Of course, my thoughts would eventually turn to all the Japanese people whose lives were lost and how prepared I would be to take care of my own family and friends in the face of such devastation. I do live in Seattle, so earthquakes and even tsunamis are real dangers that shouldn't be ignored.

Sadly, I can't say I'm prepared at all. So I'm determined this month to buy 72-hour kits that will always be ready to go in the event of an unplanned evacuation from our home. I'd also like to beef up our nonexistent food storage supply, but that will take a bit more time and effort. In addition, I've often talked with my wife about how we should keep more cash at home for an emergency.  However, the truth is I've never been good about keeping emergency cash on hand.

I use rewards credit cards for everything we buy, so the only time you'll ever find cash in my wallet is if I just sold something on Craigslist. Even then, it usually finds its way back into an online savings account before the end of the day. I'm thinking $1,000 in small bills sounds like a reasonable amount to keep in a safe place. Hopefully that would be enough to cover any necessary expenses until electronic methods of payment were restored. But that number is really just a shot in the dark.

Do you keep a chunk of cash on hand for emergencies? If so, how much and why?

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Joshua Heckathorn's picture

Joshua Heckathorn is a credit expert and has been featured on CNNMoney, FOX Business, Yahoo Finance, The Street, and many other national publications during the past twenty years.  He received a Bachelor of Science in Management (Finance) from Brigham Young University's Marriott School of Business and earned his MBA from Seattle University.

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Sumer's picture

Not that I have done the follow-through....but I believe my homeowners policy has a limit to the amount of cash they will reimburse in the case of a home fire. Maybe $500 or so? It seemed like a reasonable figure to me, and has the added benefit of being fully insured.

Joshua Heckathorn's picture

Good point. Time to dig out my homeowner's policy and read the fine print. Sounds like an exciting Friday-night activity!