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Emergency Fund: Keep Cash At Home To Survive a Disaster

Updated on September 30, 2015
drpennypincher profile image

Dr. Penny Pincher founded the popular personal finance blog Penny Pincher Journal in 2013 and has published two books about saving money.

You Might Need Cash To Survive a Disaster...

The other day, I heard about a near-miss that made me glad I keep cash on hand in case of emergency. On July 23, 2012 a massive solar flare nearly hit the Earth. A direct hit could have severely damaged infrastructure and disrupted telecommunications and other technology for a long time. Can you imagine the chaos if millions of people suddenly lost access to their bank accounts and credit cards?

Cash Can Help You Survive a Disaster
Cash Can Help You Survive a Disaster | Source

I experienced a cash shortage first hand during a flood here in Iowa in 1993. I went to the grocery store and found that it had lost power. Generators were running the lights, refrigerators, freezers, and cash registers. The lighting in the store was dim, and there was tension in the air due to the flooding. People were anxious and wanted to stock up on emergency supplies.

Handwritten signs were taped to the doors and check-out lines that read “Cash Only”. There was a problem with the credit card system, so even though the cash registers were working, they could only take cash. The ATM in the store was also down, and other ATMs in the area were also out of service, so there was no way to get cash easily if you didn't already have some. Plus, it was a Sunday, so banks were closed. If you didn’t have cash, you couldn’t buy anything.

Cash Can Help You Survive a Disaster
Cash Can Help You Survive a Disaster | Source

After this experience, I have always tried to keep some cash around. There is something satisfying about having some cash around. By cash, I mean actual money under your mattress or in a safe spot in your house where you can go look at it anytime and could quickly access in case of emergency. Having money in a bank account is also considered “cash” from the perspective of types of investments. But in an emergency, having money in an account somewhere may not do you much good.

The Cost of Keeping Cash at Home

There is a cost to having cash around. If you have debts, you could use the cash to pay down the debt and save yourself some interest. Or your could invest the cash and make some return on the investment. Keeping cash on hand does not pay in terms of monetary gain. In fact, the cash decreases in value over time due to inflation. Another downside to keeping cash at home is the risk that the cash will be stolen or lost in a fire.

Don't Lose Your Emergency Fund!

There was a story reported about an old man who hid his cash supply of $10,000 in the pocket of his old sport coat which he kept in his closet. This worked fine, until his wife took his sport coat and donated it to Goodwill- without removing the cash! My wife probably wonders why I am so interested in looking at old sports coats at Goodwill...

Keep Your Emergency Fund Handy For Surviving a Disaster
Keep Your Emergency Fund Handy For Surviving a Disaster | Source

Don't Keep Your Emergency Fund in Your Wallet

Even knowing the trouble with keeping cash, I still keep some on hand, but I keep it at home. I don't keep much cash in my wallet- that just makes it easier to spend.

My wallet is usually empty, and I don't keep money in my car either. One time, my tire was quite low on air and the only working air pump around at the gas station took quarters. I had no money at all with me, so I went in to the gas station and asked if I could borrow a quarter to put in the air pump. After this incident, I try to keep at least a quarter in my car.

There are things that could happen that would make keeping cash around worth the trouble, such as:

  • Access to cash may be limited in a natural disaster such as a flood or power outage
  • An economic disaster or panic could suddenly result in a scarcity of cash
  • Bank and credit accounts could be lost due to identity theft, computer error or malfunction

How Much Cash Should You Keep At Home?

After hearing the news item about the near miss with the solar flare, I thought about increasing my cash supply at home. How much cash would it take to survive something really severe like that? The solar flare could have caused a major catastrophe lasting months or even years. Could I put away enough cash to survive a prolonged disaster?

Why Hoarding Cash for a Major Disaster Won't Work

I think cash may be useful for some amount of time in a severe disaster, but if things were really bad for very long, cash would not be that useful. After a few days, stores would be out of essential merchandise anyway. At some point people would start taking what they need whether they have cash or not. So I don’t think there is value to keeping a lot of cash around for a major disaster. Having a bunker with canned food and other emergency supplies would be a better approach than keeping cash if you are worried about surviving a major disaster that would last for a long time.

Check out my blog for tips on saving money every day: Penny Pincher Journal

Keep Enough Cash for a One Week Disaster

The most likely scenario is that you’ll need to use cash to get though a few days or even a week during a disaster. I think a good target would be to have a few hundred dollars for food, a few hundred for gas if you need to leave the area, and a few hundred for a short stay in a hotel if you need to. So $1,000 is a good target for the amount of cash to keep around if you are a bit paranoid.

I think most people would be comfortable with a few hundred dollars in cash at home. This would be enough to buy food and gas for a few days at least. Keep the cash somewhere safe and where you won’t be tempted to spend it.

Do You Keep Cash at Home for Emergencies?

See results

© 2014 Dr Penny Pincher


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    • Tidbits25 profile image

      Micha ELa 

      11 months ago from Philippines

      I needed some cash on hand during the lockdown. There was such a long line in the ATM. Well written.

    • drpennypincher profile imageAUTHOR

      Dr Penny Pincher 

      6 years ago from Iowa, USA

      Wilderness, I have come to think of cash as an emergency supply along with the usual emergency supplies such as food, gasoline, water, batteries, etc.

    • wilderness profile image

      Dan Harmon 

      6 years ago from Boise, Idaho

      Some good thoughts here, and something I had never considered. While we generally have several hundred dollars worth of groceries on hand, there are always other things that might be necessary. Batteries for the flashlight, maybe.

      I think it's time to put a little under the mattress and a gas tank worth in the car as well. You never know...

    • drpennypincher profile imageAUTHOR

      Dr Penny Pincher 

      6 years ago from Iowa, USA

      Thanks creativelycc! I have been thinking about getting a small safe at home to protect cash and documents. You can buy "fire safes"- I need to read up on these to learn how effective they are in case of fire.

    • creativelycc profile image

      Carrie L Cronkite 

      6 years ago from Maine

      Excellent advice because as you said, you never know when a disaster may hit. It is very wise to keep some cash stowed safely away at home.

      I have a friend who keeps all of her cash in a professional safe at home. She and her husband got sick of bank fees.

    • drpennypincher profile imageAUTHOR

      Dr Penny Pincher 

      6 years ago from Iowa, USA

      Justin, cash can be an important emergency supply- and may even help you avoid some types of emergencies.

    • profile image

      Justin Bivens 

      6 years ago

      My wife and I follow Dave Ramsey and keep an emergency fund! So this really is great advice. If you keep and emergency fund you will stop having "emergencies" as far as money goes. Great article!

    • drpennypincher profile imageAUTHOR

      Dr Penny Pincher 

      6 years ago from Iowa, USA

      sheilamyers, it seem like the more you think about things that could go wrong, the more you worry about not having enough cash...

    • profile image


      6 years ago

      I'll have to give some thought to increasing the amount of cash I keep around the house. I do keep some, but probably not enough to last a week if I had to pay cash for everything. Thanks for the good advice.

    • drpennypincher profile imageAUTHOR

      Dr Penny Pincher 

      6 years ago from Iowa, USA

      Rhonda Lytle, a hurricane is a good example of a disaster that can limit your ability to obtain cash if you don't have it on hand. Interesting that stores were emptied out before the hurricane even hit.

    • Rhonda Lytle profile image

      Rhonda Lytle 

      6 years ago from Deep in the heart of Dixie

      I think you make some really good points. After Hurricane Ike, it was just over a week before the stores right around our house had power and supplies. They were emptied of anything useful in the mad rush before the disaster even hit. Some folks on the island were in that boat for several weeks. While we heard there were ATM machines a few miles away, the roads were blocked and just moving around was a nightmare for a while.

    • drpennypincher profile imageAUTHOR

      Dr Penny Pincher 

      6 years ago from Iowa, USA

      bensen32, it is amazing how fast business as usual can break down. Thanks for your comment.

    • bensen32 profile image

      Thomas Bensen 

      6 years ago from Wisconsin

      I mention this in one of my own, nice on the detail here, something most people don't even think about. Those credit and debt cards will be no good even in a power outage.

    • drpennypincher profile imageAUTHOR

      Dr Penny Pincher 

      6 years ago from Iowa, USA

      suzettenaples, having cash during a disaster wouldn't solve every problem, but could make the situation more manageable. Thanks for reading!

    • suzettenaples profile image

      Suzette Walker 

      6 years ago from Taos, NM

      This is really a great idea especially with the state of the world today. Who knows what may happen next and it is good to be prepared.

    • drpennypincher profile imageAUTHOR

      Dr Penny Pincher 

      6 years ago from Iowa, USA

      misterhollywood, watch out for earthquakes out there!

    • misterhollywood profile image

      John Hollywood 

      6 years ago from Hollywood, CA

      Excellent post and very practical advice. Thanks for sharing this!

    • drpennypincher profile imageAUTHOR

      Dr Penny Pincher 

      6 years ago from Iowa, USA

      Yes, there seems to be a lot of trouble in the world right now. Watching the coverage of the Ebola outbreak today got me thinking about disaster survival...

    • ologsinquito profile image


      6 years ago from USA

      Good reminder. Things seem to be so edging in the world right now.


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