Emergency Cash: Why to Have It and How Much You Need


Let’s talk money. Emergency money.

If you’re like most people today, you rarely carry cash because you use a credit or debit card to make almost all of your purchases. While cards can be convenient and compact, they can also present a problem in an emergency.

In the event of a wide-spread power outage, think about how quickly it would become difficult to access your own money. If the power goes out (which has been happening more often this winter), stores won’t be able to run their card machines, you won’t be able to access your online banking information, and no ATMs will be running. Those who rely solely on using cards for purchases will be in a bind.

That’s why we suggest having emergency cash stored in or near your emergency kits. Having cash on hand can be crucial for getting items you need, fueling your car for evacuation if the outage affects several states, or meeting other needs that arise during the crisis.

How much cash you keep on hand will depend on several factors, such as how far you have to travel to your evacuation spot, how many people you’ll be financially responsible for, and how well-stocked your supplies are.

As a bare minimum, we suggest keeping $20 in small bills and coins available to make purchases for a short-term emergency. Ideally you will want to keep $100—more, if you’re comfortable keeping additional cash around. For a more custom solution, think about your emergency plan, and consider possible scenarios where you would have to spend money (e.g., There is major flooding so you can’t stay at home. You have time to evacuate by car, but have no relatives in the area. All your friends have to evacuate, too. Would you have enough money to pay for a hotel—if there’s one with available rooms?)

If you’re able to establish an emergency cash fund in one fell swoop, then there’s one less thing to worry about. If you need to build it up over time, start with $20, and add a set amount each month. Soon you’ll have a good supply of cash. It’s likely you’ll never need it for a big emergency—but when the time comes to put it to use, you’ll be glad it’s there.

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