Friday, March 20, 2009

Some Cash in Your Pocket...

My sister was telling me of how she recently was at Costco getting some groceries. When she was ready to check out...she found that the lines were really...really long (I'm sure that is hard to imagine!:)) What was happening is that there was some problem where the credit card terminal system was down and they couldn't accept credit cards of any sort. The only way to pay for groceries was going to be cash or check. My sister had neither. She said how people were distressed wondering how they were going to pay for their groceries. Luckily for my sister and many other people who were register became able to somehow take card transactions...and so by standing in a really long line...they could all get their groceries.

Many preparedness circles would say to have some cash on hand in case of emergency. I would agree that this is a good plan. We cannot expect that the electronic machines will always be up and running to take our cards and to dispense the cash we need. Having some change for phone calls and small bills for making purchases is usually their advice. The rationale for having small bills is generally that larger bills may not be able to be broken and you could pay more for something than you need to.

The church has also recommended "cash savings"....

"We encourage families to have on hand this year's supply and we say it over and over and over, and repeat over and over the scripture of the Lord where He says, `Why call ye me, Lord, and do not as I say?'... We also hope that you are maintaining your year's supply of food, clothing, and where possible, some fuel and cash savings." President Spencer W. Kimball: GC April 1976.

I was
recently stopped at church and asked for advice on how much cash someone should have on hand. It is not a question really for me to answer. It must be decided by the individual based on their situation and beliefs. The questions I have back are these...

1. In an emergency...what could you want to what quantity...and how much would it cost?

2. What do you think the value of the dollar will be during the emergency? Will the price of the supply you need remain the same that you are accustomed to...or could it go up in price?

3. What is the severity of the emergency you are preparing for? Will it be like my sisters experience at Costco...or will it be a full blown loss of all infrastructure?

4. Would that money be put to better use paying off a bill or other worthwhile place...or to be put in storage for that rainy day?

5. How much money do you want to have in what place? How much for your wallet or purse? How much for your safe? Your office? Your bug out bags? Other?

The answers to these questions should help you to decide the size of the denominations...and quantity. It is not as easy as saying "Yeah...have only small bills...and this amount"...because it should vary based upon a persons situation. You may need to have on hand large or small bills based upon your the blanket advice to have only small bills is in my opinion not always applicable.

If you feel like you have all of the items of "intrinsic value" that you need and that you don't plan on needing anything else...then I would think that you shouldn't need a lot of cash....the value of which may be destroyed through inflation.

As President J. Reuben Clark said...

“… when we really get into hard times, where food is scarce or there is none at all, and so with clothing and shelter, money may be no good for there may be nothing to buy, and you cannot eat money, you cannot get enough of it together to burn to keep warm, and you cannot wear it.” (Church News, November 21, 1953, p. 4.)

It should be understood when storing cash that if the disaster is severe may only be good until people realise that it no longer has any value...and discontinue trading goods and services for it. Then people will only want the things that money can buy when it has worth...the actual fuel. The effects of hyperinflation can quickly turn the cash "rich" people into paupers...and those that have items of intrinsic value into the "rich" people.

I wish you the best in your decision!

1 comment:

  1. Well written!!! It really was a crazy feeling being at Costco and not being able to pay for groceries with my handy piece of plastic! It really was a reminder to me to get things in order and especially my cash reserve!