I used to keep $150 hidden in my car for emergencies. I keep less than $100 in small bills in a backpack with food and water for use during natural disasters. I've got a fire safe in my house for legal documents and computer backups. Should I have a stash of cash there as well? Many people recommend 6 months of expenses in a savings account with cash or equivalents. How many days/weeks of expenses should someone have in physical paper currency?

Edit: I mentioned the fire safe because I think it is good at protecting (paper) things from fire, not from theft.

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    I used to play a lot of poker, and kept between 1 and 2K in my safe. I've never found a need for more than 1K, but having at least 500 available (with some in small bills) is very handy. You never know when something like your textbook incident will occur. Even if you use it to save a trip to the bank before a vacation. – Pete B. Jan 5 '17 at 14:33
up vote 17 down vote accepted

Coming from an area that is hurricane prone, and seeing what happens to local businesses during evacuations/power outages/gas shortages, I think what you already have on hand should be sufficient. And it sounds like that's exactly what you're budgeting for.

I'd say 2 weeks worth of fuel and food costs, with the budget for each in line with riding out a natural disaster. True "Preppers" would say keep your money in gold buried in the backyard surrounded by land mines, but that's not perhaps what you're looking for. It is not uncommon for gas stations and grocery stores to revert to cash only sales, especially if they're not big chain operations. If the internet is out, or power is spotty, they may not be able to process CCs. Again, think smaller or more rural businesses. I have seen gas stations switch to cash only during gas shortages as well to help limit how much fuel people were buying.

$250 should get you through fine unless you drive a tank and need steak every night. You could probably go with less, but it's entirely dependent on your needs. As Joe rightly stated in his answer, if it's desperate enough times that you can't use a CC or debit card, cash may not even be useful to you.

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    Well, I do need steak every night, but that's beside the point. – Nathan L Jan 5 '17 at 1:32
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    I would also suggest making sure that some of the cash is in small bills that way you do not need to rely on the merchant being able to make change. – Eric Johnson Jan 5 '17 at 1:40

It's also worth thinking about minor "emergencies" when the location of your cash may be more important than the amount. I keep a baggie of change and small bills in my glovebox for meters and tolls. I keep a ten dollar bill in my armband when I go out for a jog or bike. Those little stashes have saved me more than once. Zombie apocalypse money? I just have a couple hundred at home.

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    One of the times I dipped into the cash stash in my car was to buy a used textbook at a steep discount for cash from another student. Not an emergency, but it saved me a significant amount of money. – Nathan L Jan 5 '17 at 5:32
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    I'd call that an investment @NathanL – Pete B. Jan 5 '17 at 14:30

No cash is necessary for most people. In the modern day in the US there is no need to keep paper currency around for emergencies; any sort of emergency that knocked out all of the ability to use plastic (ATMs, credit cards, etc.) for an extended period of time AND knocked your bank out of service would be of the level that cash might not have any value either. Your $100 of cash for natural disasters is likely more than enough, and even that I wouldn't necessarily consider a vital thing in this day where even a major natural disaster probably isn't going to have too much impact on the financial sector outside of the immediate area (that you should be exiting quickly). Keep however much cash around that you need for day to day cash expenses, and that should be enough.

The level of emergency that would suggest cash being needed would probably need more than you'd actually want to keep around, anyway - i.e., a complete collapse of the American or World financial system would imply you need months' worth of cash. That's just not feasible, nor is it practical financially. You should have your emergency fund making at least a bit of interest - 1% or so isn't hard to get right now, and in the near future that may increase substantially if interest rates go up.

It also would make you a substantial theft target if it were known you had months' worth of cash around the house (i.e., thousands of dollars). Safes don't necessarily give you sufficient protection unless you've got a very good safe - commercial ones are only as safe as the ability to crack them and/or transport them is.

Now, if you find yourself regularly out at 2am and run out of cash, and you live somewhere that ATMs don't exist, and you find yourself needing to pay cab drivers from time to time after a drunk bender... then I'd keep at least one cab's worth of cash at home.

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    That's why I wrote days/weeks in the bolded question. Months worth of cash wasn't even contemplated here. And interest on days/weeks of cash is so negligible that there's no need to worry about such a loss. – Nathan L Jan 4 '17 at 21:02
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    I think this is bad advice. If power is off for a long period of time, like happened in hurricane Katrina, ATMs and charge cards are not useable. Having a few hundred dollars in cash is wise and the interest on it would be minuscule now anyways. – zeta-band Jan 5 '17 at 0:51
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    @Joe commerce has been done for millennia before the cash register. If the gas station has a generator so they can run the pumps, they will be happy to take my cash. And I might just need that gas to evacuate. I think you underestimate how long basic services can be off for. – zeta-band Jan 5 '17 at 1:05
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    @Joe, I've lived in snowy areas where a blizzard knocked out the power for the area for over a week. Evacuating wasn't really necessary, and there were still some stores open, but credit cards weren't really an option. – Joe Jan 5 '17 at 1:46
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    @Joe, same here, only it was a windstorm. Any business that was still open would take cash, recording the transactions on paper if needed, but it was hit-or-miss whether they could take credit cards -- even if the business had power, it was quite possible that they didn't have an internet connection to process the cards. – Mark Jan 5 '17 at 2:23

In Hawaii I remember experiencing a few hurricanes, storms and blackouts. When the power is knocked out some stores will still operate in the daylight or even with generator electric but registers will still be down. I remember buying an extra flashlight, radio, some non perishables when our island was without power for 24 hours. I now keep twenties and smaller bills as some stores may not carry much change. I heard a fellow paid $10 for a case of water because the store did not have small enough bills. (Many were paying with twenties and alas their change was exhausted and could not be replenished) Also some will round up tax to the dollar. So whatever the amount it should be smaller denominations. That being said I do frequent small shops and restaurants that operate cash only. Its still convenient to have cash on hand.

protected by JoeTaxpayer Sep 14 at 9:46

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