So! In one way or another, some proverbial shit has hit the fan, and now we’ll see how successful your D.I.Y. financial planning is going!
Have you got a decent amount of cash tied up in the stock market? Great! Let’s unpack that for a moment and see what that means. You’ve at some point met with your fancy-dancy accountant, asking them to invest x% of your income into an assortment of stocks you’ve never heard of in hopes that you’ll make out like a bandit once you hit your 80s. This also means that the money you’ve put aside never gets addressed until your accountant retires and asks you thirty years after your initial conversation, “so what do you want to do with this now?”
Jumped on the bandwagon and finally listened to that one friend of yours that kept going on and on about precious metals? “It’s a great investment” “What’re you going to do when the grid goes down, and you can’t access your bank accounts?” (okay, maybe that second one has some truth to it, but Ben shot down my “This is what to do when we revert to the Wild West” article, so not today…), so what? Have you got a few dozen ounces of gold or silver? Unfortunately, the value fluctuates very minimally, so unless you’ve been stocking up since the 1970’s you’ll be hard-pressed to see how much they’ve gained in value.
Still, have a box of those old trading cards or collectibles your spouse has been badgering you about why they’ve been with you for every move? People will pay big bucks for those (if they’re the right ones)! You’ve got to find the right buyer, and if you’re in a crunch, the time it takes before you find one may not be enough.
Granted, all those mentioned above are more for long-term comfort and security, but what if something happens this moment and you can’t access your investments/bank accounts?
Don’t sweat. There is another option! Keeping cash on hand is never a bad idea, whether it’s to give some as a quick thanks to someone for lending a helping hand or if you’re faced with a situation where you have to hit the ground running and can’t access your funds elsewhere. The question is, how much cash should you keep at home? Depending on the situation, the amount of cash could make all the difference.
While writing this, gas prices are currently sitting around $5.00/gallon, but with the way things are going, I’d wager we’ll be approximately $8.00/gallon my Christmas (Ho! Ho! Holy crap!). One measurement I like to use is the approximate distance from coast to coast. Yes, I know not everyone would necessarily have to drive that, but it gives a baseline you can work from. One of the longest routes is Route 50, which runs from West Quoddy Head in Maine to the Point Arena in California – approximately 3,527 miles if you miss an exit along the way.
Now, for today’s lesson, we’re going to use one of the most popular cars on the road today. The Ford F-150! The ’22 model has a 23-gallon tank and gets about 21mpg combined, meaning you’d have to fill up roughly eight times to make it across the country, shelling out about $2,200 along the way to keep that bad boy running. For anyone that doesn’t have a ’22 F-150, check your make/models tank capacity and do some simple common core math to find the correct answer.
Of course, that would be a one-way trip along the longest route in America. Suppose you have a designated Meeting Point (which you should already have) for an emergency. In that case, you can always use that distance or another measurement such as the location of friends or family to gauge distance and how much cash to have on hand to get there.
Another thing to consider is the cost of your monthly grocery bill when thinking about how much cash you should keep at home. Or weekly, for that matter? If your card doesn’t work for some reason, how were you planning on (legally) feeding yourself and your family? Cash is king, baby. The average household is about four people, so depending on the age of those in the home, how much food/water would you need to get by? The national average places the monthly cost of groceries at about $411 a month. Sound about right? That doesn’t account for other miscellaneous items purchased along the way, such as prescription medications, diapers if you happen to have a newborn or the “non-essential” items like toilet paper or condoms. At that rate, it might be safe to say about $600 goes to keeping the house “running” per month.
Remember that you’re not looking to keep all your cash/life’s savings stashed away in the drywall of your bathroom like some wannabe El Chapo. Instead, just enough to get by in case an emergency arises, and you find yourself S.O.L. otherwise. We’ve gone over a few scenarios, but the most important thing to do is review your finances and see how much you can/are willing to convert to cash and keep in your home.
Don’t start hiding away cash in the vents of the home if you can’t afford to do that in the first place. What are things that you know you will need on a daily/weekly/monthly basis? Also, this may go without saying. DO NOT disclose how much and the location to ANYONE. Remember, snitches end up in ditches, so when your kid decides to use your money in a Tik-Tok, remind them of what happened to Whitey Bulger.