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Keeping Cash on Hand

Written by Nickel - 88 Comments

My wife and I have always talked about keeping a lump sum of cash on hand, hidden away somewhere in the house, in case of emergency. That being said, we’ve never really settled on an amount much less withdrawn the money and stashed it. But this week we found ourselves with a sizable wad of cash in a kitchen drawer, which got me to thinking about this all over again.

As an aside, the cash is from a failed attempt to buy a new dinette table from craigslist. We saw one that we thought we might like (based on the teeny, tiny pictures in the listing) so we headed out to take a look. Since they were located about 25 miles from our house, and since we wanted to have cash on hand for bargaining, we stopped by the bank on the way. When the table turned out to be underwhelming, we returned home with the money.

Returning to the issue at hand, we’re struggling with how much to keep around. $500 seems like a nice round number, but I really don’t have a good feel for this. Honestly, I don’t even have a sense for what sort of emergency might arise where we’d need the money. But it still seems like a good idea, especially with four little kids relying on us for food, shelter, and safety. So…

Do you keep an emergency cash on hand? If so, how much? And what would you envision using it for?

Oh, and before you get any bright ideas about figuring out where we live and raiding our kitchen drawers, we’re moving the money and you’ll never find it… ;)

Published on January 9th, 2008 - 88 Comments
Filed under: Miscellany

About the author: is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

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88 Responses to “Keeping Cash on Hand”

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  1. 1
    SingleGuyMoney Says:

    I think that just seems like a large amount of money to have hanging around the house. Personally, I would keep no more than $100 on hand.

  2. 2
    Misyt Says:

    I used to volunteer as an Emergency Preparedness Coordinator, and I would recommend for you to keep enough money for three days of living. Most of your emergencies last about this long before other help can come in.

    The first thing I would recommend is getting a fire-proof box. Keep important papers in there, along with your money. Copy your credit cards (front and back), insurance policies, copy of driver’s licenses, list of doctors names, addresses, and telephone numbers to keep in your fire box. List all medications and strengths, too. This will help you if you need important medication.

    The amount of cash to have on hand will vary from person to person. I would have people keep a list of these expenses for one month. Then you’ll get a better idea of how much you’ll need for three days.

    All of these are for three days:

    * Gross income, just in case you can’t get paid time off of work.
    * Gas for at least one full take. You don’t know how far you might have to drive.
    * Hotel room(s) for three days. Again, this depends on your comfort level. Do you want to stay in a place with a kitchen, or would you rather have the “convenience” of eating fast food?
    * Enough to purchase basic clothing for each member of your family. This expense can be eliminated if you keep a Jump Bag ready and put old clothing in it. Per person, I recommend two shirts, 1 pair of tennis shoes, 1-2 pairs of socks, 2 pairs underwear, 1 pair of pants, sweater/sweat shirt, jacket.
    * Food for each person for three days. Fast food is easier in an emergency, but this is really up to each person. If you want to cook, remember you’ll need money for utensils, unless you keep camping gear in your jump bag.
    * Toiletries. Some people can live without brushing their teeth for three days, some cannot. Items to consider: shampoo, conditioner, hair brush, hair ties, hair dryer, mouse/gel/hairspray, toothbrush, toothpaste, mouthwash, dental floss, lotion, deodorant, feminine hygiene products, prescription medications.

    For myself, I have the majority of this stuff in a Jump Bag ready to go with the cash in there. I believe I have around $1,000 in there for just myself. In an emergency situation, I’d rather have too much money than not enough. Keeping camping gear will be even cheaper, because then you can camp out somewhere, reducing the amount of money you’ll spend.

    Just some ideas.

  3. 3
    nickel Says:

    SingleGuyMoney: Keep in mind that this is for two adults and four kids. The “right” answer will probably vary somewhat based on your family situation, but I can’t see $100 going very far in our circumstances.

    Misyt: Thanks for the thought provoking response.

  4. 4
    Brent Says:

    We are keeping $1000 in the house for an emergency. That might or might not go away once we get completely out of debt but we’ll look at it then.

    Our reason for that amount is it allows us to easily deal with anything that might come up. Car repair, house repair, kids emergency, etc. Perhaps it’s to much but as the previous commenter said I would rather have to much than not enough.

  5. 5
    Brent Says:

    ETA – we also have four children, aged 5-12.

  6. 6
    FMF Says:

    We keep about $200-$300 on hand at all times.

  7. 7
    Blaine Moore Says:

    I used to keep $100-$400 in our safe depending upon how much I’d made playing poker, but I haven’t played for most of the last year and since we hate hitting the ATM that money is basically depleted.

    I should find myself another game and build my stash back up…

  8. 8
    Colin McConnell Says:

    I think how much cash you should keep on-hand also depends on the likelihood that a ‘disaster’ will strike in your area; I.E., hurricane, flood, ice, tornado, earthquake, etc. If you are in a disaster-prone area, I think $1,000 is a bare minimum … $2,500 is better. If you are in a less disaster-prone area, then $500 to $1,000 should do fine.

    Of course, the number of adults and children in your household comes into play as well.

  9. 9
    Ron@TheWisdomJournal Says:

    I usually keep between $500 and $1,000 on hand, but lately, I’ve found that cash gets spent. Maybe it was just because of Christmas.

    With the ease and availability of ATMs and the general acceptance just about everywhere, I question whether I need to keep anywhere near that amount. If there was a major disaster and my home was hit, could I find this money? I don’t think so! Try telling your insurance company, “Oh yeah, guys, I had another coupla large hidden in the kitchen drawers.”

    That being said, having some cash on hand probably IS a good idea, along with water, first aid supplies, non-perishable food, copies of your deed, driver’s license, SS card, pictures of your family, copy of your car title, some checks, wow, this list is getting long.

  10. 10
    David Says:

    $500 is a good amount, and you can always at least buy some gas if the power goes down for a while.

  11. 11
    Prince of Thrift Says:

    I don’t like the idea of having cash lying around the house. Keep it in a savings account that you can easily access with your debit card.

    2nd God forbid your home is broken into or burns, most insurance companies won’t cover more then $200 cash that is laying around a covered persons home. So with that, if you do have this stash I would agree with SingleGuyMoney who suggested no more then $100. That would leave room for spending money that you might have at the time of such a tragic event.

  12. 12
    Sandy Says:

    I don’t currently because I have several ATMs within walking distance, but if I did I probably wouldn’t go any higher than $200, which is what my homeowners insurance covers.

  13. 13
    TNTalk! Says:

    I would find a better place than a kitchen drawer. Aside from that, what is wrong with a private stash? What would you do if the ATM machines suddenly stopped working or the electronic cards were to stop functioning for any reason? You would be able to use your cash instead of running out of gas or going hungry. Whatever the case, keeping all your money in the bank accessible through the use of an electronic card for safety is only seductive reasoning, not reality. What is safety when you give that safety into someone else’s keeping that doesn’t have your interests at heart?

  14. 14
    ntguru Says:

    Funny timing on this! My wife and I just went through the same thing.

    To the folks who talked about ATMs: yes, that is true. But, you are typically limited to $400. Also, in the event of a moderate to major disaster or emergency (eg. extended power outage, an e-terrorist attack, etc) ATMs may not be working. One other thing to keep in mind is that getting a substantial amount of cash from a bank can take several days. As more and more exchange of money becomes electronic, there is less and less cash on hand at a bank. This dependence on computers makes some kind of terrorist or rogue nation attack on the infrastructure just a matter of when, not if. If financial institutions detect something like this I would not be surprised to see a temporary freeze on ATM/debit/credit cards to help contain potential damage.

  15. 15
    Early Retirement Extreme Says:

    Didn’t see anyone mention it, but if you’re keeping it for catastrophes, keep it in small bills. A $100 bill or even a $20 bill is no good if you are buying something for $1 and nobody has any change.

  16. 16
    Brion Says:

    Do you live near a fault-line? Do you live near a volcano? Do you live near a port? If you do then you have to worry about being displaced for a long period of time and potentially having to leave in a moment’s notice due to earthquake, eruption, or nuclear terrorism.

    Any of those have the potential to a) displace millions of people and b) knock out power for a prolonged period of time.

    No ATMs, no way to get cash from our online hi-yield accounts, runs on banks and grocery stores, and chaos on a grand scale. I know I’m a bit paranoid, but I’d rather be safe than sorry.

    So, we try to keep at least $2,000 in cash in a safe at home. And we keep a jump bag with emergency supplies right next to the safe.

  17. 17
    ChristianPF Says:

    after Katrina hit a few years back and many people who thought “oh, that could never happen” found themselves in a new world without most of the modern conveniences – I decided we needed some cash on hand. I think we are at about $150, which I agree with you nickel won’t get us too far, but it is a start.

  18. 18
    db Says:

    Twice I’ve seen blackouts in NYC prove that cash is a handy thing to have on hand, as ATMs (and credit/debit processing equipment) were not functional.

  19. 19
    Rick Says:

    I don’t keep anything in my house. Mainly because I’m hard-pressed to think of a disaster where I couldn’t use any of my diverse credit cards or debit cards or ATM cards, and where I couldn’t use checks.

    In cases like an extended blackout or a terrorist attack, I wonder how many stores would even be open. And if things get really desperate, I could always revert to the old-fashioned method of bartering and trading hard goods, rather than cash.

    Personally, I can see reason to keep an emergency supply of food, clothing, and medical supplies, but I don’t see much reason to keep cash.

  20. 20
    C. Ward Says:

    During a crisis like Katrina, would having cash have helped at all? Were there consumables to be purchased and places capable of accepting payment for them?

    Even during major ice storm of late last year, either stores were closed, out of necessities (like water, etc.) or open and functioning with electricity?

    It seems like any emergency which would render plastic unusable would also limit one’s available options for using cash as well.

    I could be wrong, I’ve never been through anything on the scale of either of those events and hope I never have to go through one.

  21. 21
    rocketc Says:

    We can usually scrounge up about 30 bucks in our house. Much of that is probably change.

  22. 22
    Frugal pursuit Says:

    Having cash on hand is one of my goals this year. I would like to have at least $50 in a kitchen drawer. Not much compared to others but what I am comfortable with keeping.

  23. 23
    esme Says:

    A few years ago, we had a major black out. I had $10 in cash and all the ATMs and obivously credit card machines weren’t working.

    When people were lining up at grocery stores with duffel bags, I was a little scared and wished I had more cash. My fridge full of food pulled through that incident but after that I kept cash for a bit. Now I’m back down to $20 cash again. Your post reminded me of why I should keep some cash.

  24. 24
    Debbie M Says:

    I like having around $50, in small bills and quarters, in a cup at home. I use this for things that require quarters (water, laundry), for eating out in a group where I want exact change, for grabbing something at the local roasted chicken stand when I’m low on cash, and just basically dealing with one of us not having gone to an ATM when we should have. So, it just gives us a little flexibility.

    There are some interesting points here about real emergencies. I still don’t know what I think about that and am looking forward to more comments. (I did have a couple of hundred out, in small bills so I could give exact change, in case something weird happened during Y2K, but all those programmers did a good job and we didn’t need it.)

    Note that with kids (and roommates) there may come a time when one or more of them absconds with money. (Sorry, but even good kids go through phases.) And kids are very good at finding hiding places. So you may want a regular hiding place and a back-up hiding place, or you may want to check regularly to be sure that it’s still there, because that’s not something you want to discover right when you need the money.

  25. 25
    Chief Family Officer Says:

    Interesting, I wouldn’t have thought this could be a controversial topic. To me it seems like a no-brainer to keep a good amount of cash on hand, but we live in earthquake country and in a high cost of living area, so we figure we might need a lot of cash if the power goes out for days, especially if we can’t stay in our house.

    As someone else mentioned, I recommend keeping a lot of it in small bills since people are unlikely to want to or be able to make change in an emergency, if you’re buying relatively inexpensive things like water, food, and batteries.

  26. 26
    Briar Says:

    Water is far more important. I’ve lived through two disasters where there was no water in town for weeks. As a result, I’m never happy with less than ten gallons of drinking water on reserve. I also try to keep a few recycled two-liter bottles full of tap water handy for washing.

    I had a roommate once who scoffed at me for keeping water in reserve. Then the water main broke and we had no water for three days on our street. He didn’t mind using my reserve then.

    Keep some cash handy, but water is far more important. And don’t forget to include your pets in the calculation of how much you need.

  27. 27
    Adam Says:

    $100 is way too little emergency cash on hand. I usually have close to that in my wallet.

    A stolen wallet or blackout means all those cards wont help you at all.

    And despite what monopoly brainwashes you, the bank error is never in your favor, so thats a concern with the ATM as well. ;)

    $500 sounds about right for a single person, $1000+ for a family. In a safe, that you never touch except for actual emergencies. The atm not being close by is not an emergency.

    If you wanted to be really paranoid, 1 months rent/mortgage would be a better minimum if theres some kind of payment emergency.

  28. 28
    PT from Prime Time Money Says:

    Great topic. I’ve never given this much thought. We do have a fire-proof safe that would be an excellent place for a couple hunny. That’s what I’d feel comfortable stashing away. Thanks for the idea.

    @Sandy – Good point on checking with homeoweners insurance to see what they cover.

  29. 29
    Frugal Dad Says:

    I think $500 is a good minimum number. That should cover two or three nights at a hotel plus “walking around money” for food, etc. I envision this being used if your home lost power for days, or was damaged and unlivable because of some natural distaster.

    Misyt presented some really good ideas. I have some camping gear here from when I used to camp, including a camp stove, some propane bottled, etc. We could always fire up the stove to heat soups, ramen noodles, boil contanimated water, etc.

  30. 30
    donna jean Says:

    All great comments, I favor having cash on hand but just haven’t had enough to do so. One thing I’ve not seen mentioned relates to the area where you live.

    Perhaps because we’ve moved to a much more rural area, cash is king again. That was a big change from my plastic only days. I know that if we have emergency repairs come up that our handyman will be expecting cash when he shows up at the door — so we should put some aside cause the ATM isn’t all that convenient.

  31. 31
    vh Says:

    Ten bucks. I have ten bucks and some change.

    But… My area isn’t prone to natural disasters: no earthquakes, no floods, no tsunamis, no hurricanes, no tornadoes. I suppose we could have a terrorist attack, but I could be hit by lightning this afternoon, too.

    My neighbors had something over $500 in a safe when their house was burgled. The perps took the safe. The insurance did not cover cash, period. So the vics lost all that money and had no recourse.

    That said, all the comments here make me suspect it would be good to have at least a couple hundred bucks stashed in the bottom of a Tampax box. Like Rick, I do keep enough food, water, clothing, and meds to tide me over for a week or ten days, and I never let the car’s gas tank drop below half-full. I don’t use ATMs…where I live, you’d just as soon not have anyone watch you withdrawing money from a hole in the wall.

  32. 32
    Double Journey Says:

    That sucks you made a big trek only to be disappointed by what you ended up finding.

    I recently posted some stuff for sale on Craigslist. I made sure to take nice big pictures so that anyone who came to get the item was not disappointed. I had no issues with people who did not want to get it after they saw the actual item.

  33. 33
    Todd Says:

    A 1000 is a good number then a goal is 3 months of your income. This is based off of the money map at http://www.crown.org a great site.

  34. 34
    nickel Says:

    Todd, I’m not talking about an emergency fund, I’m talking about how much money to keep in the house at all times in case of emergency. You’re not really advocating three months of salary on hand (literally) as opposed to in the bank, are you?

  35. 35
    Brandon Says:

    Reading this has made me consider what would happen if there were a really bad disaster that caused your cash to be effectively worthless for the goods you wished to purchase. I suppose advocating packing away items for barter would be a little extreme because in such a case the economy has probably completely collapsed, and you would be uncertain what anyone would want or need.

  36. 36
    Jamie Says:

    My wife & I (no kids yet) keep about $200 in small bills and change in the house. We keep it in one of those boxes that looks like a book that stays at the bottom of our bookshelf.

    We also keep about $100 in the car at all times. The money stays hidden from sight in a small compartment in the car. This is enough to be able to pay for a tow truck or buy gas if the credit/debit cards are unavailable for any reason. To us the money in the car is much more important than the money in the house. We figured we’d be far more likely to find ourselves in a situation where we’d need cash for food, gas, emergencies, etc. while on the road than at home.

  37. 37
    Tim Says:

    depends on the purpose of having cash on hand. I think most people understand cash on hand for emergency use. In this case, cash on hand should mean your bug out fund. It should be sufficient to cover the expense of getting you and your family to safety. In a real emergency, the cost will undoubtedly be higher so you should factor that into your planning.

    after you reach safety, your normal emergency fund should cover living expenses in your safe area until the crisis is over.

  38. 38
    Jenni Says:

    I have a goal of having $250 in cash (2 adults 3 kids), but we keep raiding it. I use it for babysitters & the occasional purchase requiring cash. We have about a 9 month supply of food and personal hygiene items, and a 2 week supply of water, (which I actually find easier to maintain than the $250 cash), with the goal to have a year’s supply by 2008 end. If the big one (earthquake, flood, insert catastrophe here) hits, I figure our food will be a pretty good bartering tool.

  39. 39
    Jeff Says:

    This is an interesting conversation and one I, like many others, hadn’t really given much thought to.
    However I would be a little gun shy about having a huge wad of cash in my house, as our house was broken into this past Christmas. I was scratching my head wondering why they broke into our house and now I have the answer. 1000+ would have been a good pay day for them. Fortunately we didn’t have any cash and came home ~5min after they had entered the house.

  40. 40
    Billy Says:

    We usually keep around $3800 in cash in the house. I’ll explain why the large amount in a moment. I keep about $300 in a kitchen junk drawer and then $1500 under the TV shelf in our den, and $2000 hidden in my closet under some out of season clothes.

    Why I keep such a large amount has to do with the fact I was robed at gun point at an ATM two and half years ago.

    I won’t go into the details, but I approached an ATM in my car. The light which should have illuminated the area had been shot out with a pellet or bb gun. When I pulled up, I was ambushed by two men who held a gun to my head. I was forced to make multiple withdraws before I shifted the car into gear and sped off. Needless to say, I want to avoid the ATM as much as possible!

  41. 41
    Jeff Says:

    @Billy.. Holy smokes I can’t even imagine what that must have been like. I had the adrenaline shakes when I walked into my house and realized not only that my door had been kicked in but also that the guy was still in the house.
    Do you live in a state that allows a CCW?

  42. 42
    unimax Says:

    I always keep $200 cash at home.

  43. 43
    Penny Says:

    I keep $300-400 available at all times. I live in earthquake country and have had family members go through the joy of no power/water for several days. I also don’t let the gas tank go below half empty, keep an emergency kit in the car with change of clothes, blanket, water, and power bars, plus keep about 15 gallons of water at the house along with a stash of canned food. (which reminds me that it’s time to replenish the canned food supply)

  44. 44
    Giga Says:

    My husband and I keep a $100 bill in a drawer near the door for use in emergencies.

    One day I woke up to go to work to realize that my purse was missing — I had left it in a taxi cab the previous night. Without a bus pass, ATM cards, a cell phone, or any small cash, I wouldn’t have been able get to work on time (no car) or call my boss, but the $100 enabled me to catch a cab and not miss my very important morning meeting.

    When we lived in a hurricane area, we tried to keep closer to $300 on hand during stormy seasons since ATM machines and any sort of electronic transaction machine could go down for days at a time following a storm.

    We are young and without kids, though, so I might imagine that others may need/want more on hand.

  45. 45
    Finance Monk Says:

    wow some of you guys have a ton of cash-on-hand out there.

    Granted my situation could be a little different being a young single twentysomething, but the only cash I have on hand is in loose change and a couple of twenties in my wallet. I feel safer having it in in a megacorporation’s books in all of these disaster scenarios you guys are talking about. I guess if I need a tank of gas that badly I’ll hock my watch.

  46. 46
    Siena Says:

    I only keep an emergency twenty in my wallet. I don’t keep cash in the house. I know people who do and I think why keep in inside when it can at least earn a little in a savings account. I also knew a family who was targeted because people knew they kept a lot of cash in the house–sure enough while everyone was at a funeral, thieves broken into the empty house and took all their cash.

    So I admit, I am not a fan of leaving cash around the house–however there have been a couple times, especially during 3 day holiday weekends where I have gone to an ATM only to have it empty–it had run out of cash. And I never really thought about an emergency like Katrina but I don’t live in a disaster area.

    If I had a family, for peace of mind, keeping a few hundred in a safe place isn’t a big deal–but I think as one poster mentioned, keeping water, canned food (with can opener) and a flashlight is probably more important.

  47. 47
    Jennifer Says:

    We have about $200 in small bills stashed for an emergency. It isn’t nearly enough though for our family of 6. I need to take more out, but haven’t gotten around to it. With the cash in our wallets, change jar and what the kids have, we might be able to come up with another $100. Still not enough. I need to rethink, you have gotten some great responses.

  48. 48
    Julie Says:

    I keep $200 in the house, to be used only in a natural-disaster quality emergency. I hope that would be enough to buy food and gas while we drive to somewhere that the ATMs, credit cards etc are still working (in-laws in neighboring state, for example). I have two toddlers.

  49. 49
    scooter Says:

    Read this URL about some things that happened during the Katrina disaster.

    http://www.frfrogspad.com/disastr.htm

    If you think your plastic or electronic machines will be worth something when the banks go down or when the electric goes off, you’re not being very safe.

    Keep enough cash and supplies to get you and your family to a safe area and enough to wait out whatever has driven you from your home. And if you’re worried about it getting stolen, you need a safe that’s fire proof and bolted to the floor.

  50. 50
    KC Says:

    I usually keep about $200-$300 around the house. I like to carry cash, but no more than $60 in my purse. This way I have a steady supply without going to the ATM 3 times a week. Dumb me, I keep it in the kitchen, but I should put it in my fireproof box, just in case of fire.

    I’ve learned the hard way that freak things can happen to knock out the power for a couple of days – I’ve been in a few major hurricanes and a really freak wind storm that was devastating. And there are two things you need when the power goes out – cash and gas. So I keep my gas tank half full, too – learned that the hard way – gas pumps don’t work when the electricity is out. But $200 would do my husband and I well for a few days until the power came back on. Usually 3 days is about the most you’ll have to go in a large city without some areas getting power that you can access for necessities.

    As for worrying about theft, I really don’t. If someone breaks in my house and demands money I’m giving them the $200 – it might just be enough to make them leave and to keep me alive in the process – after all I live in the city with the highest rate of larceny in the country.

    I guess its a personal choice. I suppose if you wanted emergency money stored in your house, but not cash, you could always do travelers checques. If someone steals them they can’t cash them. But if something happens and you need money you can use them.

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