In Disaster, Cash Is King

If you lived in or around New York City during the summer of 2003, surely you remember the blackout that brought the five boroughs to a screeching halt, shutting down businesses in the nation’s financial capital.

Cash became king on that sweltering August day as ATMs and credit card machines became unavailable. In a society where consumers opt for the swipe of a card over dishing out the mean green, the inability to pay for goods and services left many out in the heat.

Unexpected events such as the 2003 blackout and Hurricane Katrina emphasize the importance of building an “in-house” emergency fund. Indeed, a three- to six-month emergency fund is necessary in case of job loss, injury, death, or other unforeseen event, but there are also those events that may require quick cash.

“You want to have enough money so you can at least survive for five days,” says Genevia Gee Fulbright, president and COO of Fulbright & Fulbright.

Your in-house emergency fund should be able to cover food and transportation for at least one week should you be unable to access your checking account or your actual emergency fund account.

And if you’re forced to evacuate to another state like those in New Orleans, that in-house fund will be what holds you over until you can use your debit or credit cards.

Pick a Hiding Place

Where do you stash this oh-so-necessary cash? Well, I won’t tell you where it should go, but Fulbright did name a number of hiding spots you should steer clear of.

Stay away from putting money “in the freezer, cookie and flour jars, under the mattress, in a regular drawer, and pillow case,” say Fulbright, who warns those are the first places thieves usually look.

Instead, think like a thief. Where would you not look if you were hastily trying to break into someone’s home?

Unusual concept? Possibly. But it’s about protecting your well-being and being prepared for an emergency, so get to it.

Finally, your in-house fund is not a substitute for a traditional emergency fund, which should be in a money market or traditional savings account. (Click here for a cash reserve worksheet.)

To determine how much money you should save in an emergency fund, click here for a Required Monthly Expenses Worksheet.

Renita Burns is the editorial assistant at