Learn why a little talked about financial question may be the most important action you take with money.

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Linda,

I had an unexpected "trial run" of what it would be like if the banks were shut down. My car was broken into and my purse was stolen with my credit cards and checkbook. I had to shut down all my accounts on a Friday. If it hadn't been for the emergency cash that you have been recommending for some time, I wouldn't have been able to get my car repaired, the locks changed on my house, my drivers license replaced, medications filled, groceries, gas etc. Because of fraud & identity theft, there's no temporary cards or checks or replacements done online. It takes a week to get replacement cards, checks etc. My passport and birth certificate became my lifelines and thank goodness were not in the purse. I am fortunate in that I could have used my business accounts in a pinch but what if those had been unavailable too?

Thank you,

Marie

It's different than your emergency fund. An emergency fund is for unforeseen expenses such as a car repair, dental or medical emergency, etc. That can be kept in a bank account. But what if you can't access the bank? ATM goes down (happened many times, most recently in England), DDOS internet attack, or EMP (electromagnetic pulse) flare from the sun, grid problem.

Now you need cash on hand!

How much cash should I keep on hand?

At least 3 months grocery money, gas money, restaurants, supplies. In general about 1/3 of what your total monthly budget is (more is even better). If you spend $10,000 a month including your mortgage, then I'd have at least $3,000 on hand, for $1,000 a month, $300.

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