Today’s action step, as part of the disaster preparation series, is to stash some cash for emergency situations.
Your bank has had a computer glitch and your accounts have been wiped. How will you put petrol in the car to go to work?
There is a widespread power outage. EFTPOS and ATMs are down. You need to fill a script. How will you pay?
While it is not a good idea to hoard your life savings under the mattress, it is a good idea to keep a little cash safely stashed away, in case of an emergency.
One place to keep some cash is in your 72 hour kit. If you have been evacuated, you will have some cash on hand to make purchases if necessary. Small denominations are better to stash than large notes – receiving change may not be possible.
A ‘small’ amount of cash (at least $100 if you can, $500 is often recommended) - in small denominations, put in a safe place, but one which you’re not going to forget will ensure you can still make purchases should your bank be inaccessible.
If you’re wondering where you’re going to find $100 to set aside for emergency cash (and I can relate to that), remember you don’t need to put aside an entire emergency fund all at once.
Instead, collect that money over time.
Deposit the change from your wallet each week into a jar or put all your $1 coins or your $5 notes aside, whenever you have them. It’s surprising how quickly these little amounts add up, as long as you’re not dipping into your fund for everyday expenses.
So as part of your emergency preparation, put aside some cash in a safe place and in your 72 hour kits. You never know when you might really need it.
Melissa Goodwin is a writer and the creator of Frugal and Thriving who has a passion for living frugally and encouraging people to thrive on any budget. The blog is nine years old and is almost like her eldest baby. Prior to being a blogger and mum (but not a mummy blogger), she worked as an accountant doing other people’s budgets, books and tax.
SarahN says
This is something I actively practice – not just for the emergencies like you imagine, but the ‘I can’t be bothered/don’t have time to go to the ATM and I need money’ and I access my stash. I replenish it with money I don’t spend from my weekly cash withdrawal/allowance. It works well, too, when tradies come to the house, to have cash on hand.
I don’t keep it in small notes though, often it’s a $50, so I will consider mixing up the denominations more. I’m not at $500 yet/ever, but it does get over $100 often, so that’s a start!
Melissa Goodwin says
Excellent point! Cash for tradies!! Comes so in handy for that! Thanks for the comment.
Shane @ Financial Debauchery says
True. It really pays to have cash-on-hand. Back in the days (years actually), I never regarded it as much, thinking I have my credit in case I needed to do emergency shopping or eat out anyway. But boy was that a dead-on dumb idea. I often ended up having to eat in middle- or high-class restaurants and shopped more than what was necessary because would you swipe for $5-10 purchases? Haha. I don’t know what I was thinking. I make sure to keep emergency money of at least $100 now.
Melissa Goodwin says
It’s a pain when small shops don’t have EFTPOS – it’s a shame the bank fees are so high!
Brian says
I always aim to keep $100 in my stash separately from my everyday money.
Also use a jar for the small coins which buys a couple of slabs of beer come Christmas
Melissa Goodwin says
That’s a long time to wait for a beer :).