I feel it is wise to have some cash on hand in the event of an emergency.

I am wondering a couple of things though.....

How does one define emergency

What is the proper amount of cash to have on hand

Do you actually mean CASH on hand for an emergency? Or emergency funds for the rentals "just in case"?

In other words, for personal use, I might keep a couple thousand "on hand" in my home just because I like having it there and handy for whatever may come up. To be honest, any time we've really wanted to use that, it usually involved depositing it into the bank and doing a transfer or something.

But, if you mean an emergency fund for the rentals, that is very different. We had to spend $13,000 a couple summer's ago to redo the septic field for a 4-plex. So, it was nice to have like a $20k "emergency fund" or "cash on hand" for the rentals -- but we don't actually keep that in "cash on hand."

So, just trying to clarify what you mean. Do you mean actual cash -- and, if so, you mean not just for rental situations -- more of a personal/life question?

Excellent Question John - thanks for keeping me on my toes......

Personal (if bank is unavailable): We keep enough cash on hand for between 2-3 weeks of household expenses. Additionally, we have many small, non-perishable items that would be easy to barter. Junk silver coins, $100 boxes of bank-sealed nickels, etc.

If bank is available: 3 months of expenses.

Rentals: I don't keep any petty cash on hand for rentals. The goal is 3 months of expenses in the bank. That said, almost all repairs are handled out of monthly cash flow without needing to tap into that.

An emergency is an unexpected expense. A lot of "emergencies" are simply failing to plan. Example, Tenant says, "I had a car repair emergency and needed new tires this month."

Well... we all know tires wear out. it's not a surprise. Failing to save money for car repairs is a self-inflicted emergency.

An example of a surprise/emergency car repair would be a car with a 5 years/50,000 mile warranty that just went out of warranty last month cracks its engine block. We usually expect engines to last a bit longer...

I find that the longer I live, the fewer unexpected events happen. Life teaches us lessons on how to expect troubles and prepare for them. Whether we learn or not determines the outcome.

Lunch is an emergency.... let lunch soon.

Actual cash in the house? Not much. Only a handful of people I do any business with get paid in cash. My hair dresser and my dog groomer come to mind. Everyone else I use my Amex or Visa and get those points. Or I write a check to track for tax purposes. My house cleaner I write a check to every week.

We charge almost everything on a credit card (we get 2% cash back...so $60k/year on the card means $100/month for us in cash back) and pay it off monthly in full. So if our bank is closed, no big deal.

I keep about $80 in my wallet for unusual things or tips or whatever, and so does wife.

At home we have a hidden envelope with about $200 in it...just in case. (Don't bother robbing us lol...not worth it)

If my bank was without power, every way I currently pay for things (credit cards, my watch or phone, whatever) would still continue to operate just fine.

I can't even think of the last time I had to use CASH for anything. The only times I can thing of recently is tips. Like, left some cash on the counter at a hotel for the cleaning people. Or handed a $5 to the shuttle bus driver taking us to the airport. That sort of thing. And, heck, when we do that, I actually have to plan ahead so that I have small bills with me!

Other than that, I pretty much never use cash these days. I don't use an ATM as I never need to get cash out. So, again, my bank could burn to the ground tomorrow and I'd still be fine without cash.

The only reason we have cash in the house is because I have a couple of small side projects that each bring me about $5000/year or so. When I get a payment check from one of those, I cash it to actual cash just for fun and stick it in a "fun money" jar that my wife and I have -- without telling her. Now and then she goes to count it to see what we're up to and it is always fun for her to discover an extra $1000 or 2 in there! :)

Other than that, I tend to have an "emergency $100" (or 2) in my wallet in case something crazy happened and my credit card(s) didn't work. Haven't had to use those in years.

It is interesting to see John on one end of the spectrum and MYOB on the other.

Most of my spending now a days is with a CC, but I am always afraid of that rolling black out. So I keep enough cash to last me a few days along with at least 10 gal of gas

Ray I suppose I could keep it in the bank and have every tom dick and harry have a look at it? Lets not forget every large withdrawal is documented for the IRS.

Most important thing about cash-- it creates some whopper deals for us. I keep it rolled and have a double rubber band on it. My sister in law gets hysterical when she see's it. I can't book cruises with the cash-- that's a bummer but a cabin charge bill-- that's another story. Not that I would ever do that! But I bet some have?

I think people underestimate how much the world would fall apart if no one could use credit cards and other forms of non-cash payment. You seem to think we'd just be like "No problem, I'll just use this cash I've had stashed in my house." Just like in the other thread about where to store cash recently, I still maintain that if something so crazy happened (even just a "computer failure" or "rolling black out") -- if it was enough to cause credit cards across the country to not work -- I think things would go so crazy that you certainly wouldn't want to be the only guy walking around with thousands in cash on you...

In other words, if something so bad has happened that we have to all go to cash, then cash is going to become worthless too... :)

myob: You always seem a little overly paranoid for comfort to me. :) But, to each their own -- you do you.

Like you said, I pay my share of taxes. I'm not worried about the IRS noticing if I took out or deposited a large sum now and then.

And I also agree about cash deals sometimes -- but all I'd have to do is go to the bank and get it. Instead of having an insane amount in a rubber band... :)

Does this mean that cash is still king, until cash is worthless?

Emergency could mean different things to different people. I think Sid hit on the main idea. Keep some back for those what if's that we know are going to happen and some for those we don't know.

I would be very leery of relying on any digital form of payment as my main source. Look at what is going on with the banks right now. Are they not linked to other banks? Are they not the connection to credit cards and other forms of digital payment?

I read somewhere where over 97% of the world's money is electronic now a days.

If you have a rolling black out (California and then a distant Florida lead the way) for any length of time, I tend to agree that things would get hairy.

Bills all go to credit card that gets 2% back and deposited directly into an IRA (Fidelity Visa card).

All other expenses we use cash for. Helps me stay on budget a little better. Each Friday I pull that weeks budget cash out at the bank. I tend not to spend money as much if I see the cash dwindling down (that and I’m a tight wad).

I do also keep a couple thousand in cash inside my safe at home for emergencies. Haven’t ran into an emergency yet where I needed the cash but still nice to have.

6x6: Some banks are "linked" to others concerning loans and such, but, in, they aren't really "linked" when it comes to using credit cards UNLESS you mean the entire banking system failing. In which case, again, cash also wouldn't mean anything.

And, again, I support having emergency funds for a project or whatever -- but that sort of money doesn't need to be stored in your house.

Do you pay for gas with cash? Like go in and hand it to someone like it is 1987? :) Again, to each their own, but I use a credit card for everything and I've been flying free on points for the past 5-7 years because I do so.

It would take an event that caused a nationwide panic for credit cards to suddenly stop working. And if the nation panics to that degree, cash in your home will mean one of two things:

1. It'll be meaningless because everything fell apart.

2. It'll make you a huge target for having stashed thousands and thousands in a fire safe.

Again, it isn't going to happen anyhow. Or the likeihood is SO tiny that you're still many times more likely to be better off putting your thousands in the bank.

John MI-- did you say "overly paranoid"?

John I read, I listen, I research and then process.

This is what is in this peanut brain of mine. The DOJ, FBI, Atty General, Buttigieg (or whatever) Sec of State, Russia and China and lets not forget the poor Holocaust victims of WW2 in Ukraine????????? (who are starving). This is just a small sampling, as I get older and wiser, of what makes me paranoid.

I find myself thinking more and more about those in prison now for Jan 6. You have no idea how close I was to going to DC to support the now X. My wife, my crew all witnessed first hand the harvesting of ballots day in and day out at different job sites we were on. It is now sickening to think of it.

I don't keep a majority on my cash here as I said 75% is in a safety dep box and safe for now.

ALL MEN ARE CREATED EQUAL AND EQUAL JUSTICE UNDER THE LAW in my mind is a fairy tail taught in grade school. and frankly a lie! but sure sounds good.

I keep some cash on hand. Have maybe $400 in my pocket. Have about 10k in one of the fire safes. That money is my fun money. I buy non biz related stuff with it mostly.

I like to have cash available for immediate purchases tho. Was in the market for another trailer. The auction house charges like 5% for cards. Sometimes they put holds on checks. Cash gets me in and out.

My credit union is not open on Sunday or Monday as well as a lot of holidays. I have never had a debit card and never used an ATM. My cash if more for life happens fast.

Then again I do have caches in different areas. Food, clothes, small cash, guns, bullets, trauma kits. These are set up more for natural disasters than the zombie apocalypse. Fire, tornado, etc. at the main house.

Thank you John.

I am old school and like to use cash.

RentsDue,

Takes a good fire safe to keep paper money intact. I have a decent safe in the den with another firesafe inside it. One of the little ones.

I don't lock the little safe. If someone somehow got in and found the first safe they have to get into it. Then if they found the little one I would hope they would unlatch it, take the money and scram. Thus leaving the documents I have in there.

I just had a real life emergency and here's how it went: I used to keep $10K/property (8-plexes) for emergencies. About a year ago, I upped it to $15K/property. I thought this was fine and it served me well for 10+ years. Last week, I had a plugged drain. Had plenty of them over the years, so I wasn't worried. 1st flood I sent the handyman. He cleared it saying it was mostly cat litter. 2 days later, it flooded again. Sent handyman again - he said he pulled up some feminine products - again, not terribly unusual. 3 days later, the apartment floods again. I send a licensed drain cleaning company. They cleared it and said they thought they got it, but did not have the camera that night. Still, thought it was clear. 4th flood a week later - I call out the same drain cleaning company insisting they use the camera. Turns out the cast iron pipe disintegrated...beneath the concrete-floored apartment. Bid? $30,000, not including replacing tubs, tile work, drywall damage, or carpets. And, we aren't done. Had to let two tenants end their leases, and have 2 more with no water for 2 weeks while work is completed. That means 2 vacant apartments (no income) and 2 apartments that I will have to financially compensate somehow for loss of use/inconvenience. Insurance? Yep. I've got it. No, they won't cover "maintenance." Renter's insurance? One *may* cover it. One won't. So, I'm bracing for a $40,000 loss in one swoop, which wipes out the emergency funds AND I don't have income until I get it back up and running correctly.

As for cash on hand? I have my own emergency funds invested with a fiduciary. I have enough to cover this multiplex drain issue. Green dollar cash? I don't keep a lot of it. Saw my elderly father lose +/- $10,000 from a stealthy home-health aid who stole it from his hidden spot. Insurance covered $200. Police could not trace cash. No way to dispute it, or even prove he had lost it. I do use credit cards - namely Discover, because of their generous cash-back program. I pay if off monthly. I usually pay for my winter vacation largely with the cash back rewards earned. I can enhance the cash-back if I get e-gift cards off their site, but I don't usually do a lot of that.

Point is, emergencies are really only emergencies if you cannot imagine them happening and have not prepared for them. They escalate in emergency points if you have several arise simultaneously. If they are unilateral, i.e., your neighborhood is experiencing the emergency - then safety and protection become priorities. Desperate people do desperate things. My advice? Stay calm. Stock your canned foods. Enhance your friend base, so that you can trade on strengths. Join a church or social group if you don't know people. Learn a handy skill...something that could help in a pinch - like welding. Be part of the solution instead of adding to the problem.