One of the most common preparedness pieces of advice is to get out of debt. When you’re out of debt, you can begin planning for your future. Recent events in Kiev teach us about cash.
There’s a lot more to financial preparedness than simply paying down your credit card. Getting those creditors off your back is smart, but your plastic won’t be worth much if there’s ever a situation like the kind in Kiev.
We don’t think there will be widespread violence and turmoil in the U.S. like there was in Ukraine, but there have been several times in our recent history when similar emergencies occurred. The LA Riots, for instance, left many people unable to safely roam the streets of their own neighborhoods (and that was only 20 years ago when we weren’t in a recession)!
Simply saying “It won’t happen to us” is setting ourselves up for trouble. We believe it’s always better to be prepared. There’s a lot we can learn about preparedness we can learn from Kiev, but for now, here are top things you can do to protect your family if something like that should ever happen in your area.
Emergency Funds Need to be More than Digital
Many people have a savings account where they keep a nest egg in case of a rainy day. That’s a great idea; everyone should have a savings.
But if there’s a problem and you can’t get to your bank, how are you going to spend your cash?
One idea is to keep some cash stored at home in a safe or other hidden place. If you need ideas of the best places to hide your cash. This way, if there’s ever an emergency, you can grab the cash and go.
You might be a little worried about keeping large amounts of cash. That’s understandable. But at least in our opinion, it’s smarter to keep a nest egg in your home than to risk not having it at all.
How Much Cash You Need
According to Dave Ramsey, a smart amount of cash to have on hand is $500 if you’re just starting off (such as if you’re a college student), and $1,000 when you’re more established. This set of funds should be your emergency fund and not ever be used for your other purchases (such as going on vacations or big expenses).
However, what if we took that to the next level?
What if you were to get either $500 or $1,000 cash per person in your family?
For many of us, this kind of cash will take a while to accumulate. But having it in the family safe means much more peace of mind well before an emergency situation occurs. This makes it a goal worth pursuing.
What About Gold?
I’m sure a lot of you are thinking, “If we have a major economic collapse, paper money won’t be much good!”
An alternative to the suggestions above is to have an equivalent amount in gold as part of your emergency fund. While the price of gold fluctuates, having $1,000 worth of gold per person in your family should be a good goal to set.
Picking the Right Safe
You have a lot of options when choosing a safe for your home. (You could even use an old couch to hide your firearms!) When it comes down to is, though, there are three basic ways of evaluating a potential safe:
b. Burglary protection
c. Water resistance
Spend time looking at your options and determining what perils your cash, valuables, and documents are most likely to face. For example, water resistance is much more important for people living in flood-prone areas.
Here’s a step-by-step way to pick the right safe:
1. Find a safe with a minimum one-hour fire rating. This means the safe will protect its contents for a minimum of one hour in flames.
2. Try to find a safe with good burglary protection, too. Burglary protection and fire resistance are independent from one another, so a safe with a high fire rating may not have high burglary protection and vice versa. You may want to consider a safe you can drill into the floor to further discourage potential burglars.
3. Determine what you’ll put into the safe — this will let you know how much volume your safe needs to have. Try to keep it as small as possible in case your safe needs to be portable (although this may be difficult if you’re going to keep firearms in it).
4. Choose a combination lock instead of a keyed lock. This way, multiple people can open the safe in case of an emergency — not just the person with the key.
5. Be willing to spend for the right safe. Remember, this is an investment in your family’s emergency preparedness. You’ll be keeping emergency funds, important documents, and more inside.
Do you have any cash-related tips we missed? Let us know in the comments!