Money is going digital. When your check goes straight to your bank account and you pay your bills directly from that account, you might never see an actual bank note. On the other hand, should you have some cash on hand? You might need to tip someone, or pay for a service, and what about an emergency? If a tornado hits your area, the power goes out, and your home is so damaged you can’t stay there, you might need some cash to get lodging and food.
So how much?
First, remember cash is an insecure asset – it can be lost or stolen or even burned in a fire. You want to store your cash in a safe place. Cash loses value to inflation, so you want most of your cash in the bank.
Opinions range from several hundred dollars on hand up to several thousand, and some “experts” think consumers are better off merely stockpiling an equivalent amount of emergency supplies (Yes, some folks actually suggested that!)
Nobody can deny that in a disaster scenario, cash can be handy to have on hand, but so can commodities. Disasters can create mini-economies of need. Five gallons of gasoline might be priceless. Four gallons of water might be irreplaceable. Canned goods might be essential, especially during extended periods of need.
In these situations, scarcity will cause prices to rise. While cash could be handy, you might need the commodities more. In short, it’s still better to have some on hand than to hope the ATM works!