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Fast Track Prep Tip #5: Every Prepper Needs a Cash Reserve

Avatar for Gaye Levy Gaye Levy  |  Updated: November 24, 2020
Fast Track Prep Tip #5: Every Prepper Needs a Cash Reserve

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We prep because stuff happens.  Little stuff, big stuff and everything in between.  And while the focus of our preparations is often a major disaster or collapse of some type, the reality is that our preps come in handy for all types of other scenarios as well.

As recent as December  2013, millions of folks were left without the ability to pay for their purchases when their credit and debit cards were caught in the Target data breach.  This was not something that was expected and those without supplemental credit or cash were left in a pickle during the busiest shopping period of the year.

Every Prepper Needs a Cash Reserve

For some, the loss of a job, unexpected repairs, or medical bills have resulted in little left over at the end of the week to pay food, gas or the utility bills. It is times like this when a cash reserve becomes handy.

Things do indeed happen and the solution that stares us in the face is the need to have a cash reserve.  We need to have the proverbial cookie jar with some extra change – or these days dollar bills – to get us through the rough times.  We also need to have cash so that if and when the ATMS and credit card machines don’t work, we have a fallback.

Today, Backdoor Survival Contributing Author Rob Hanus is back with his thoughts on having real cash, a savings account, and low debt.

Go Back To Cash

Debit and credit cards can be quite convenient, but they have an ‘Achilles heel’ in that when the power or network goes down, the electronic verification system cannot verify the card and the transaction is denied. This can also happen with paper checks. When this occurs, making purchases with your checks, debit or credit cards comes to a stop.

There was a time, not too long ago, when most people used cash. Today, the majority of us use cards to pay for purchases and carry few bills in our wallets, or have stopped carrying cash altogether. There are several significant reasons why you should start using cash again and veer away from the “cashless society.”

BENEFIT #1 – Cash is King

As noted above, there are any number of reasons that could prevent merchants from processing payments of cashless cards and checks. However, if you’re standing at the gas pump with an empty tank and the pump won’t accept your card, you won’t care what the reason is; only that you’re unable to put gas in your tank. Having cash can make the difference as to whether you are able to get fuel.

More seriously, if there was a collapse of the dollar or other economic collapse in this country, you’re going to see many stores stop accepting any form of payment except cash. In times of uncertainty, people become very protective and even business owners won’t be too keen on accepting forms of payment that they can’t be assured of getting reimbursed for.

BENEFIT #2 – Get to know your neighborhood merchants

When you use cash to pay for your fuel, typically, you go inside the station to pay for it. This gives you the opportunity for the small talk that occurs while you wait for your sale (or pre-sale) to be ran through the register. Likewise when you pay with cash at other places, there is a more personal interaction with the clerk. You never know when you may need the help of one of these people and them knowing you can go a long way.

BENEFIT #3 – Start a small savings account at home

When you use cash, you get change in return, including coins, but don’t spend any of the coins! Even if you can make exact change, use a bill instead. When you get home, put the coins into a coin jar. Depending on how many times you use cash throughout the average day, you could be adding $1 to $2 to your coin savings every day. It’s an easy way to save up a little extra money without putting a strain on your budget.

BENEFIT #4 – Keep your debt low

None of these benefits are more important than the others, but the importance of keeping your debt low cannot be understated. The less debt you have, the more financial freedom you retain. With the current average interest rate of credit cards hovering around 17%, using credit is tantamount to shackling yourself into financial servitude. We’re lured into thinking that, “it’s only a small payment, I can afford it,” when in truth, all it does is make you a slave to the issuer of the credit card.

By using cash, you’re paying for something now, not later. We’ve seen what happens when families get in over their head (repossessions, foreclosures, stress, divorce, suicides, etc.), but it can be avoided by not getting into debt in the first place.

The Final Word

Gathering new gear, learning how to use it and stowing it in a bug-out-bag is a pretty cool thing to do when you’re a prepper.  Some may even consider it fun (I do). On the other hand, the more mundane task of saving money, reducing debt, and accumulating cash can be a boring drudge.

If you have not done so already, I would like to challenge you to begin to stash away some cash as part of your ongoing preparedness effort.  As Rob suggests, setting aside  dollar a day – or even a dollar a week – will allow you to save up some cash without putting too much strain on the budget.  It just makes sense.

Enjoy your next adventure through common sense and thoughtful preparation!

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44 Responses to “Fast Track Prep Tip #5: Every Prepper Needs a Cash Reserve”

  1. Gaye, Glad you got up and running again, was missing you articles. I have learned that tylenol/arthritis works really good for sore/tired muscles.
    Been awhile since I’ve posted. been in bed sick for 10 days now with a cold, funny how a cold affects you differntly the older you get. We have always put change in a jar of some type. I think it is very prudent to have a sizable amount of cash/change stashed. But.. if things dont improve for some time, no cash or medals of any type will be good, simply because after an initial event, systems will still be down. As goes for radiation fallout, if its really bad, how long can you keep going with those mimimal preps you have saved, or be able to consume food stuffs after, say 2 months.soon, you will either run out, or, no one has anything to barter with. these are at best, temporary, although nessesary. Hence the long term resolution of storing food, having skills, and a means of procuring things primitively. i know from experimenting, that tupperware is waterproof. rubbermaid is good, but not water proof for storing outside somewhere, above, or below ground outside, I would vacuum seal, then place the items in a tupperware container. if you have a garden, or chicken coop, you can hide them somewhere around these areas, or in a hollow log or tree and plant a daffodile with a colored rock or something. by the by, if anyone knows of a reputable source for purchasing small denominations(ie dimes, quarters,etc) silver/gold, I would be quite interested. I am on a limited budget, but would like to purchase a little at a time.

  2. Change jugs work! Each year I start Jan 1st. Last year got close to $700.00 by dropping change daily. My wife empties her purse and I empty my pockets. Really works. Spend it on preps and silver.

  3. I personally have a full size, fireproof gun safe bolted to the floor with about 3000 rounds of heavy ammo in the bottom. It took 2 men and a dolly to bring it in empty, so I feel reasonably sure it is here for the duration. I keep cash for my immediate needs, but for long term storage, I keep coins. Rolls and rolls of coins. They don’t wear out. As far as storing bartering item, I go for the ones that don’t have an expiration date. Salt, sugar, honey, wheat (all grains), alcohol, and all sorts of gardening tools. These will never lose value. Always the 4 “B”s. Beans, Band-Aids, bullets, and booze. No I don’t store gasoline. I don’t plan on going anywhere. No work is complete until the paper work is done, did I say TP?

    • A lot depends on your goal. Do you want a one month emergency supply or one year. You budget also plays a role since you still need to live (pay rent, utilities and eat) now. A good start is here: // and //

      It would be nice to have a cash reserve of $1,000 or more but even $100 is a good start.

  4. Personally I think a cash reserve is a bad idea.Gold and silver and barter items makes more sense to me.I mean if the economy collapses what good will your money be.I say if you can’t afford gold or silver get barter goods and have no money.I’d hate to be sitting on a lot of money that was worth something when I stashed it but is worthless once I need it.Your barter goods will probably be worth 10 to 40 X’s what you paid for them and your cash will be worth pennies on the dollar

    • I think that is exactly the kind of issue we need to decide individually. Partly the decision hinges on what we are prepping for.

      If we prep only for the worst case scenario, though (like a sudden, total economic collapse) then we are not as well prepared as we could be for anything less than a worst case possible collapse.

      In most such lesser cases money will be hugely important for most people for such things as buying gasoline as they flee a major hurricane by driving a few hundred miles inland, or paying rent or doctor’s bills in a lesser personal emergency like loss of a job.

      It is those less than worst case problems which are the most likely, and we need to get through them more or less intact if we are to survive a Big One.

      A major power outage which lasts several days or a few weeks is far more likely on any given day than TEOTWAWKI. Here in Hawaii, a bad hurricane is more likely than a major earthquake, but both are certain to occur at some point, and they are more likely than most other problems.

      I don’t think we can survive TEOTWAWKI in Hawaii, so we don’t bother trying to. We do prep for the most likely problems, and do so reasonably well if not perfectly. Part of that is a cash reserve for buying whatever might be both needed and available, and ideally having enough cash to buy plane tickets out of here if credit cards aren’t working but fleeing the state seems like the best option. Airlines are highly unlikely to take gold coins in payment. They want cash or a credit card.

      I am not knocking gold or silver at all: I think they are both part of a balanced prep plan. I just think that cash is as well. There are few cases where cash would lose all value overnight, so having a meaningful amount is one -but only one- part of financial security.

      How much constitutes a meaningful amount is something we can only decide for ourselves. Maybe a week’s normal total expenditures, or two weeks, or six months (tho that would create a security issue if kept at home in cash!)- it is up to us.

    • whos to say gold or silver will be worth anything? you cant eat it and its real value is as a commodity,in a SHTF situation the commodity markets will have collapsed.barter items is a great idea however,food ciggs,tobacco, booze ,lighters, batteries will be very valuable and sought after .Im going to start stocking up on 1/2 pints of booze ,lighters and granola bars and
      bottled waters for barter

    • Don’t forget ammunition as a barter item. If you have one or more guns, set extra ammo aside for this purpose.

    • “whos to say gold or silver will be worth anything? ”

      Exactly. No one can know for certain. However, we do know that throughout the last several thousand years, gold and silver have been considered a store of value and a medium of exchange worldwide.

      We also know that in major upheavals people have always in the past fled to gold because gold is also seen as flight capital: you can sew it into your clothes and flee across borders to countries where your home currency would be worthless precisely because of the conditions which cause you to flee.

      We can decide that 5000 years of history is no predictor of the future and at some level be correct, but 5000 years of unstable economies does give enough evidence for me to choose some gold and silver, but also some cash, because all disasters are not TEOTWAWKI.

      Like investing, where one spreads out one’s bets between stocks, bonds, money market accounts, and possibly real estate, gold, etc, because events which cause one sector to decline should help other sectors balance things out, what one might call a balanced portfolio of preps is useful. Some will not be needed, while we might wish for more than we have of others.

      Trade goods also have their place. We know that certain things have almost universal appeal- cigarettes, liquor, chocolate, but also gasoline, potable water (and hence water filters), sugar, salt, and the like.

      My point is that each of us can decide what problems are likeliest to occur in our situation, and balance likelihood against severity of consequences, and settle on what preps are appropriate for us in our situation.

      I want some gold, some silver, and some cash. There are very few problems in which cash would become worthless overnight. If one of those does occur I’ll have the other preps. That’s why a ‘balanced portfolio’ works for me. For other people maybe not.

    • i think in the short run, cash is best, because people will still be expecting a recovery; in the medium-to-protracted emergency when sheer survival is the priority, then goods are most useful, like seeds, tools, and even booze. gold and silver would be most useful after society has been somewhat rebuilt and people once again have the means and desire and spare time to make things out of those metals. what good is an ingot if you can’t make anything out of it and can’t trade it for basic survival goods?

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