Emergency Fund BEFORE Savings

hidden piggy banks 300x199 Emergency Fund BEFORE SavingsI’ve talked about emergency funds before, but I wanted to briefly go over them again since they’ve been on my mind lately.

I’ve been reading a lot of survivalist blogs lately (no I’m not a tin hat wearing paranoid that thinks the zombie apocalypse is coming, it’s research for a story I’m writing.   No really it is!).

Anyway many of the blogs don’t really cover the importance of money as a survival tactic.  They cover storing a lot of food and rice under the floorboards and the many types of the scariest looking knifes I’ve ever seen in my life, but not many of them discuss money.

In an emergency or crisis having money that you can access easily should be a priority.

In most cases that means setting up an emergency fund (in a bank – not under your mattress) of around $2,000 that you can access at any automatic bank teller machine at any time of the day or night.

Stocks (while I love them for their ability to generate wealth) take days to process and so you can’t access your money quickly.  They are not, and should not, be used to generate cash in emergency situations.

That’s what your emergency account is for.

But what happens if the banks DID shut down and you couldn’t access your money.  What would happen then?

The most common reason for atm’s not working is due to power outages.  Generally power outages don’t last for lengthy periods (and if they do, they usually don’t cover vast areas and are usually just one or two power grids).

So for that reason I DO think it’s wise to keep some cash reserves on you at all times.

I recommend that you carry around $100 in your purse or wallet and keep another $300 or $400 at home in a safe place.

That would at least cover you a few days if a worst case scenario happened and you couldn’t access your regular emergency fund from your bank account.

Generally though I don’t think keeping cash at home is a good idea (you are too vulnerable to thieves) but having a back up reserve could mean that you are able to get back in the event of a huge blackout.

So to summarise:

  • Having an Emergency Account is important – you should start that BEFORE you start your savings plan.
  • You should keep around $2,000 in an easy access bank account.  If you use some of it (for an emergency right!) then you should then top it back up again straight away.
  • It’s also a good idea to keep $300 or $400 in the house somewhere (where the kids can’t find it) in case of power outages at your bank’s ATM.  Plus another $100 in your wallet/purse for very quick access.

Then once that’s in place, you can start your savings plan.


  1. You bring up some good points here. My concern is that if the power goes out, the ATMs won’t be the only thing to crash . . . many stores are only trained on using their electronic registers, so beware! Please no EMP!

  2. Thanks for the post!
    I have just finishd reading 30 Day Spending Detox (July is MY month ;-) ) and thought I’d check out your blog.
    While debt reduction is my main aim, not having an emergency fund is one thing hanging over my soulders at the moment… But I had never thought about keeping a small amount of emergency cash at home – awesome idea!


    • Thanks Meegan! So glad you liked the book and have fun this month not spending! :)

      All the best,
      Tracey :)

  3. I guess in a real emergency, the best thing to hold is something small and portable but extremely valuable. Gold, maybe?

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