A firefighter knocks on your door. You open it and he tells you that there’s an emergency in the neighborhood affecting your home and that have only 10 minutes to evacuate. Now. And chances are, you won’t be able to set foot in your home for three or more days.
How much money would you need to take care of yourself and your family until you get back home?
Five hundred dollars?
Do you have that much cash in the house?
And even if you do, is it really safe to carry that much cash around with you during a disaster?
Remember the thousands of people fleeing Hurricane Maria, Hurricane Harvey or California’s Camp, Thomas and Mendocino Wildfires? Definitely not!
What you really need are two different things.
A specific amount of cash & ACCESS to your money.
Let’s find out how much you would need to take care of your family…
Grab a pencil and paper and answer the following questions.
If you needed to leave your area due to a disaster evacuation, could you still access money from your bank in a different neighborhood? A different city? A different state?
Do you know how much money you can take out of your primary bank’s ATM at one location? During one 24 hour period?
If you could only use cash on hand for one to three weeks, how much cash would you and your family need to take care of your normal expenses?
Do you know how much credit you have available on your credit cards? Is it possible for you to get an emergency increase? If so, do you know how to get one?
If there was a disaster in your geographical area that affected workplace as well as your home, would you still receive a paycheck from your company? Do you receive you check via direct deposit, via mail or do you physically pick it up?
Well how did you do?
If you’re like most people, you were scratching your head by the second question and running for your statements and calculator by the third.
Here are a few recommendations to make sure that you can access your money, any time and any place that you need it.
Bank Accounts/Access to Cash
Know how much you and your family would most likely need for up to five days and then up to three weeks, without access to your local bank. Here’s a great rule of thumb.
Groceries + Pharmacy + Gasoline + 2 Urgent Care Co-Payments + 25%
What you usually spend in one week on: Groceries, Pharmacy/Drug Store, Gasoline and your co-payment for two urgent care/doctor/ER visits. Once you have that figure, add 25% more to cover unexpected expenses. An easy way to save the money, is to put away a certain amount every week — let’s say $20, until you meet your goal.
If you live in a disaster prone area, consider keeping a certain amount of cash ($200-400), in a safe at home or in your evacuation location.
Know how much you can take out of the bank per ATM and per day.
Place a copy of a bank statement/check from each bank account and copies of your credit cards and debit cards (front and back) on a password protected flash drive in your emergency bin, in your safe deposit box and in a safe deposit box in your evacuation location.
If that new account won’t be your main account, be sure to deposit a little money in it or make a small ATM withdrawal every few months to keep it active.
Make sure that one of your bank accounts is with a major bank that gives you nationwide access to your money. We’ll get into this more in the next section.
Know your credit limit and the customer service number you would have to call to temporarily raise it. Make sure that you note those limits, customer service numbers and any rules or guidelines on your Vital Information Grab It & Go Form.
If you have more than one credit card or debit card, choose at least two different brands. For example a Visa and a MasterCard or Discover card. That way if one is not accepted at a store or restaurant, the other one probably will be. Going from one restaurant to another with a car full of hungry children, isn’t fun!
The most important part of this exercise is…
Knowing how much money you need to have at your fingertips
Where to keep it, so that you can access even more money quickly and easily.
What About Your Bank?
When you chose your current bank, you probably considered things like their good interest rates, proximity to your home or their friendly tellers.
Making sure that you had 24/7 access to your money in an emergency, wherever you are, probably wasn’t in your top ten criteria. Unfortunately good interest rates and friendly tellers aren’t going to help you feed your children and fill up your gas tank in an unfamiliar town.
Fortunately technology is on your side. Most major brick and mortar and online banks give you access to your money wherever you are in the country. With them, you can bank online, transfer money between accounts or to other people, and even deposit checks into an ATM which can be a huge selling point if that paycheck you’re holding is going to help you exist for the coming week. Another perq is nationwide access to ATMs nationwide or fee rebates if you have to use another bank’s ATM. With a debit card, you can even make purchases or get cash back without a fee, if you can’t find an ATM.
Just remember, if this new account won’t be your main account, be sure to use the ATM card or make a deposit every now and then, so it remains open.
And It’s Not Just About Disasters…
By the way, it doesn’t take a natural disaster for you to need immediate access to your money. What about a medical emergency? You’re in the emergency room and need cash, but the hospital only has one ATM, and it’s not for your bank. Or your car could break down a hundred miles away from home. Or, as we’ve all learned the last several years, banks can be taken over by federal regulators, severely limiting depositor access for days or weeks.
So what’s the moral of the story? Actually we have two.
1. Don’t put all your eggs in one basket
2. Make sure you have baskets every place you need them.
Keep these two things in mind when managing your money, and you’ll be in better shape than 95% of your friends. But do me a favor. Once you have things set up for yourself, share what you’ve learned. Your friends will thank you for it.
Want a copy of these instructions for later? Just download the PDF Version by clicking here
Have Fun Getting Your Stuff Together! We’ll talk later…
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