It can happen when we least expect it. And it usually does. The emergency. Life throwing us a curve ball. A natural disaster. An economic hit. And in today’s global life scape, we know National Emergencies can happen at any moment. So are you ready? We take so much for granted in our automated world. Our ATM’s, banks and on line systems hum along as we transfer funds, make transactions and live on paperless air. But what if bad weather or power outages shut those systems shut down. Or what if banks freeze accounts? How do you navigate everyday life then? Cash. Yes, good old fashioned cash. Experts say having enough cash on hand to buy groceries, gas and other items for a week is essential. Others say you need to have enough to pay for a hotel and other expenses should there be an evacuation in your area. There are countless scenarios that can play out here.
The bottom line is being prepared for any contingency plan, big or small, and having a reserve of emergency cash at your disposal at all times. Great article on the money website, Go Banking Rates.com sets us straight on how to stash cash so you’ve got some in your pocket when that emergency strikes. Here are some of the news nuggets from that column:
“Despite what many sources say, there’s no magic amount you should have nestled away in your emergency fund. Some say $500, others $1,000. Still others suggest three to six months of pay. Suze Orman’s magic number is eight months of living expenses. You might aim for a conservative $10,000, or more.”
“You should do what feels right to you. No matter the amount, an emergency fund is absolutely necessary — make it a priority. In fact, financial gurus like Jim Wang of Bargaineering and Dave Ramsey say to build up your own reserves fully expecting an emergency. ‘It’s not a matter of if these events will happen,’ Ramsey says, ‘it’s simply a matter of when.’ ”
An emergency fund isn’t meant to be dipped into, or spent like disposable income, and creating one takes the very same approach for any other savings, rainy day fund or nest egg. How much can you afford to save? And how much do you think you’ll need for an extreme catastrophic event?
Ramsey and many others suggest the first step to beginning an emergency fund is to start small. Let’s say you’re looking to set aside $3,000 in one year. That would mean you’ll have to save $250 per month over the next 12 months. Extend your savings goal to 18 months, and that’s $166 per month. If you’ve already got some money saved up elsewhere, is there a portion you can transfer to your emergency fund?
“Keeping cash at home is risky, especially when it’s in large denominations. A home break-in is the type of emergency you won’t have money for if your cash supply is stolen — physical money isn’t insured and it’s unlikely to be recovered. Finding safe, secure and clever places to hide your emergency fund (with easy access, of course) can safeguard the security of your assets — think of it like making a bank within your home. Common advice is to keep enough cash at your house, but not too much. Opt for lower denominations, like tens and twenties, since many retailers might not accept $100 bills. However, when looking to store your money in a compact fashion, larger bills in fewer quantities take up less space — it’s up to your discretion. Stash your cash away in a practical, yet unorthodox way. (Keep in mind — under the mattress is the first place they’ll look.)”
So, be wise. Get ready. And start stashing your cash!Share This Post