The Cash You Need

Cash is important. Some people think that if they at least have a credit card with some semblance of available credit on it, they have money that they can use. Not true. Nothing beats having actual cash on hand to use in situations where other forms of currency just won't work. Here's the cash you need:

• Cash in your wallet. I always keep $100 in my wallet for use in an emergency. And emergencies do come up--everything from restaurants that don't take debit cards (which you find out after you have already chowed down on your meal) to cash for a cab if you get stranded in a bad part of town to bail money (which is a whole other story).


• Cash at home. Some people have exactly zero cash at home, thinking that in an emergency, they can always use their debit card. There are times, however, when a debit card won't work. Like when you have a power outage and need to evacuate and don't have any gas in your car and the gas station down the street is only accepting cash. Like when you are heading out of town early in the morning and all of the ATMs in your neighborhood are down due to a computer problem. You get the idea. I keep $500 to $1000 securely stashed at home just in case.


• Cash in your emergency fund. Everyone needs an emergency fund. Credit cards, unlike what many people think, are not good fall backs in case of emergency as people learned when they went to use their credit cards about mid recession and found that their available credit went from like $1000 to $0 overnight because of a change in their card issuer's policy. Your best bet? Have a minimum of $1000 in your bank which is set aside for true emergencies only. Eventually you will want to build your emergency fund up to be able to cover six to eight months of living expenses.


• Cash in your retirement fund. If you want to look forward to your golden years instead of worry about them at night because you have absolutely nothing saved for retirement, be sure to start funding your 401k/403b/Roth IRA/etc. on a regular basis. With cash in your retirement account, you will have yet another source of emergency cash at your disposal (well not really at your disposal due to the huge penalties and fees that are levied if you do withdraw from these accounts if you are not of retirement age but still...it is another source of cash security).


• Cash alternatives. There are a number of things you can have on hand that can be used as cash alternatives if you are in dire straits. Things that can be easily sold/bartered/eBayed/Craigslisted/garage saled/etc in order to generate some fast cash include gold, firearms, electronic gadgets, name brand items, tools. etc.


• Cash in coin form. Many people overlook coins because, after all, what can you do with a few dimes? It is a good idea, however, to always carry some quarters with you in case of emergency (you need to hop a bus to get across town, you need to make a phone call, etc). I also keep a coin jar where I drop all of my coins each time I clean out my purse and use the money in the jar for various purposes: to wash big blankets at the laundromat, to give to the grandkids when they come to visit (they like to roll the coins then buy a treat with their rolled coins), to use at the car wash, etc.

The security of having cash on hand cannot be over estimated. You never know when having some cash at your immediate disposal can save your life, or maybe just make it a bit safer or more comfortable.