(Official discussion) Rainy day funds and cash on hand

John AdamaStaff - May 11, 2021

[See the full post at: Rainy day funds and how much cash to have on hand]

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When I began to drive (100 years ago), Dad gave me $10 emergency money to keep tucked in my wallet. Only grounded once for having spent the money on an “emergency” that didn’t meet his standard. 😉  I still keep at least one $20 folded up and hidden in my wallet — and a few more bills tucked around in the car. Comforting to always have at least a bit of cash on hand.

 

$20 in the car, for sure. Add some quarters for parking meters.

 

Informal markets give additional insight into your excellent denomination lineups. Whenever I have a garage sale, everybody wants to pay with a $20 bill. I find $5 bills the most useful for making change, even better than $10 bills. Day laborers routinely claim to have no change, forcing me to overpay (which I don’t mind so much).

So don’t be that person who only has a twenty. Swap one or two $20 bills for $5.

My cash kit contains a few mint ones and fives for use in finicky vending machines. Larger bills should probably be in new, but clearly circulated condition. Too new, and they might appear counterfeit.

I hear that black marketeers prefer the newest $100 bill design with the blue stripe. In your picture you have both designs of $100, which seems smart in case a seller has a preference, as might happen if there are counterfeits of one design in circulation.

 

Thank you for this article. I have two questions. First, if we shouldn’t store money in places where a thief can easily grab the item, then how should we store it for bugging out? Currently, I have my money broken up into three, pretty arbitrary groups. Part of it lives in a hidden place in my house, part in my BOB and part in a hidden place in my car. But I’m not sure that’s the best system. Would love some advice.

Second question: I’ve always heard that it’s important to have small denominations, as in $1 and $5 (for US money). The idea is that in a real SHTF scenario, cashiers may not be able to make change. But in the article you say that storing $20 is sufficient. I would love to just go with $20 — so much easier. But is that really good enough?

 

Great questions. I essentially do the same, with cash hidden in house, car, and BOB. You don’t want to make it so secure that it becomes impractical to get to when you need it. So it should be relatively easy for you to get to, but in a way that isn’t obvious to thieves. eg. don’t keep cash in a wallet in the front pouch of a backpack — find a place to hide it within the bag instead. 

Denominations are another personal preference thing. Yes, you could end up in a situation where you spend a $20 for something $5 and don’t get change back. But I’d rather that happen vs. not having a gross enough amount to begin with and be limited in what I can buy. 

I tend to think that in the situations where you’re actually relying on this cash + the world is bad enough you can’t get change, things are pretty bad and thus I’d rather err on the side of having too much.

 

I totally understand cash in the BOB, but beyond that, this topic makes no sense to me.  Two weeks’ worth of expenses?  What expenses?  Why wouldn’t you just dip into your emergency supplies?  

 

1.  Cash is flexible.  Most people have limited space and/or limited financial resources, so it’s more practical to keep some cash that could be used where it’s needed most, rather than try to store every conceivable item one might need.  For example, I keep some lumber and roofing supplies for repairing storm damage (cheap, store well, a matter of when not if) but I do not keep spares for every window in my home.  Windows are expensive, prone to accidents in storage, and most will probably never need to be replaced for the lifetime of the house.  So instead, I keep plastic sheeting as a temporary measure, and money in the bank that could be spent on a new window if that’s where it’s most needed.  This is only an example – if you do store spare windows, kudos on that, but what about a spare windshield for your car? All other car parts? All major household appliances?  And are all these things stored in a secure location off site, in case your home is destroyed?  The point is that however far you take it, there’s always going to be some item you don’t have on hand, and could conceivably end up needing in order to get back on track with your normal life following a minor setback.

2. Cash covers services, not just supplies.  Someone might use their emergency fund to take their child to the doctor, pay for car repairs they’re unable to perform on their own, pay their rent/mortgage or other bills on time, or any number of other expenses of eveyday life that are not physical items we can store.  

3. For very new preppers, they may only have a few weeks worth of vital supplies.  Someone with only two weeks worth of food at home doesn’t want to use that up just because they’re briefly out of work, or had to spend their grocery budget for the week on a car repair.  If they use their modest survival pantry to get through a financial tight spot, they could be caught without any supplies when a hurricane or other major event closes down stores.