Even as our economy got really hairy this Winter, we avoided repeating the Great Depression in part because Americans didn’t make a run on banks and withdraw cash to hide under the mattress. Keeping all of your liquid assets in cash may not be the smartest move, but that’s not necessarily the case for stashing a small wad of cash in a safe place.
Last week, I asked my followers on Twitter whether or not they saved cash around the house.
@mattmill said “I do. It’s my pocket change converted to large bills, no more than a few hundreds at a time, used to save for bigger items like a camera.”
“My parents (who are Vietnamese) totally do that. Not only do they keep stashes of cash around the house, but my mom also kept jewelery (diamonds, etc.) in random nooks. When I was growing up, she would stash cash inside a sort of crock pot in the kitchen cabinet! There were diamonds in the dining room hutch, etc.”
Here’s the rub: The house was totally devastated by Hurricane Katrina, and almost all of that stashed cash/jewelry was lost. Of course none of it was insured. I vividly remember tromping through the muddy remnants of our house with my mom, delving into broken-down cabinets to look for the jewelry and the cash. She found some of it, and we literally washed off the bills and set them in the sun to dry. The bank took them! But most of it was just gone.
Ylan’s tale about her parents is tragic, and a good reminder of the importance of banks (and insurance). Still, a small bundle might come in handy, whether you’re saving for a small purchase or just want the peace of mind of having a few hundred dollars in cash that’s easily accessible.
I probably keep between $100 and $200 around the house for not other reason than a true emergency. One time this came in handy was when I was living in New York City in the summer of 2003 and the entire city lost power on a hot August day. Although many banks (and merchants) have backup systems to enable them to process debit and credit cards, not all do, and cash becomes immediately valuable. (In that blackout, some ATMs in the city still worked, but had long lines and soon ran out of cash).
Certainly after a disaster like Hurricane Katrina, it would be difficult if not impossible to use ATMs or credit cards to buy emergency supplies. We all hope such a disaster will never affect us; but it’s smart to be prepared for one with a little bit of cash. I keep mine in a small fire- and water-proof safe.
What about you? Do you keep cash stashed around the house? How much? What for? Let us know in a comment!