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Monday, April 5, 2010

From the Archives: Cash is King

Below is a post from way back in 2007, with a few updates.

How much cash do you have on hand--right now?

Imagine your favorite personal disaster scenario. The power is likely to be lone-gone. No power, not ATMs, no credit or debit cards. All of our electronically held wealth becomes completely and utterly inaccessible. Sure, for the first little while, stores might still accept credit cards (writing down your info) or checks, but after the disaster situation becomes clear, you can forget that.

Cash talks. It's fast, anonymous, no-hassle. It works--for anyone, anywhere. Everybody takes cash. It's not dependent on a computer, electricity, the weather, phone lines, incompetent employees, or anything else that "plastic wealth" can fall prey too.

Some people imagine an immediate descent into anarchy and chaos. Sorry, but the world won't devolve into 'Mad Max' over night. Your horde of ammo, medical supplies, and precious metals will have to wait a while for their true "survival value" to surface.

Until it becomes apparent to the average person that the government will not recover from a given disaster and that the dollar is little more than worthless paper, cash will hold some value. Not the same value as pre-disaster--the laws of supply and demand work overtime after TSHTF, inflating prices drastically. But it will hold some value. Yep, if things get bad enough, it may become worthless, but you will have spent it long before then. And hey, it doesn't cost you more than a few percentage points of interest (or less) to have some cash stashed safely at home.

Having a supply of cash at home is a no-brainer, but far too many people overlook this. Have as much on hand as seems prudent to you--a month's worth of expenses is a good goal. Stash is away carefully--under the mattress or in your nightstand are not the best places to do so. A diversion safe, built-in hide or a real-deal home safe would be a wiser.

I also recommend packing some emergency cash with you, as part of your every day carry gear. Stash it somewhere in the back of your wallet and forget about it. I have $100 sealed in a little baggy hidden deep inside my wallet, just in case. Stash some in your BoB as well. Also think about carrying a roll of quarters for use in pay phones, vending machines, etc. Quarters are always handy to have, but they can add a little bulk. I have $10 worth in my EDC bag, and they come in handy fairly often.

How much cash you carry with you is your decision. Everyone has their own opinions, income and lifestyle. I've heard some people recommend keeping $1000 in your wallet, while I've heard others recommend just an emergency $20 or enough cash for a tank of gas. I'd sure like to have $1000 to stash in my wallet, but enough for a tank of gas is a lot more plausible. $50 can buy you enough gas to get home, enough food for several days, or a low end hotel room. It's a good place to start. More than that and you give yourself more options. For example, $1000 cash could buy you a plane ticket halfway across the world, a month's rent (in most parts of the U.S. at least), plenty of food and supplies, or pay to fix your car.

If you're horrible about spending your emergency cash, there are a few things you can do. Seal it up in a very small zip lock, or better yet, vacuum seal it. This will not only protect the cash from an accidental soaking, but it creates a mental barrier that will help keep you from spending the money except in time of emergency. Another tip: use $2 bills. For some reason, they are just a bit harder to spend than the normal greenbacks.