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How to Handle Your Cash in a Natural Disaster


How to Handle Your Cash in a Natural Disaster

With the horror of Hurricane Harvey and Hurricane Irma fast approaching, disasters are top-of-mind. Be sure your preparation includes a plan for how you’ll handle cash in a crisis.

“Five years ago, my part of New Jersey was hit hard by Hurricane Sandy and much of the state was without power for a week or more. ATMs were down and there was no way to get cash. Plus, the few stores and restaurants that managed to open on generator power could only take cash, so credit cards were useless too,” says Mike Collins, who runs with his wife, wealthyturtle.com.  “After that experience, I started stashing cash away in a few places around the house where it would be easy to grab in an emergency.  It's important to have at least a few hundred dollars (in smaller bills) on hand just in case something unexpected comes up.  I consider it part of our family emergency fund."

Roman Zrazhevskiy is founder and CEO of Ready To Go Survival, which specializes in personalized emergency preparedness. His company has helped many families prepare for emergencies, including natural disasters, nuclear threats, and supply chain interruptions. He has a few ideas about making sure you can access your money when you need it most. "Keep $1,000 cash in your bug out bag, preferably in small denominations. During a crisis, change might be scarce by so it's best to carry plenty of singles and fives for small expenses to avoid paying $20 for a gallon of water."

During a crisis, change might be scarce by so it's best to carry plenty of singles and fives for small expenses to avoid paying $20 for a gallon of water.

You can keep $200 in your pocket and $800 tucked away. “Emergencies have the potential to bring out the worst side of people, increasing the rate of robberies, looting, etc. If you get stuck up with no way to defend yourself, give them the wad of cash in your pocket. This way, they'll likely leave you alone and you still have a reserve tucked away," says Zrazhevskiy.

By the way, if you’re wondering what a bug out bag is, it’s a bag that is packed with essentials and ready to go in case there is a need to evacuate at a moment's notice. “Many bags have compartments that are great to store cash in, especially if you'll be staying in a shelter with many other desperate people. Put the cash inside a pair of socks, rolled in your underwear, or tucked into any non-obvious place. Since you can't depend on mobile banking or ATMs during a Harvey-level crisis -- all that matters is having the right supplies and cash prepared and ready to go,” says John Adama, a survival expert who runs ThePrepared.com.

Since you can't depend on mobile banking or ATMs during a Harvey-level crisis -- all that matters is having the right supplies and cash prepared and ready to go

Nick Sloane, president of Sloane Wealth Management, offers a yardstick for how much cash to have on hand in a natural disaster. “Perhaps as much as one month of living expenses.”

Be mindful too, that if you live in a flood prone area, you don’t want to store money in your car. “Six inches of water can sweep it away," says Zrarhevskiy.

Another thing to remember, he adds, “After a major disaster, emergency supplies can be worth more than cash. Stock up on extra food, water, and flashlights, etc. There's a high chance you'll be able to use it to barter for services that you need."

A small solar generator can be a good investment. Says Zrazhevskiy, “It will keep your electronics charged if the power goes out. This would allow you to send money via PayPal, Venmo, and other payment providers if ATM's are down."

Sloane says, “Preparedness is planning in advance, and not waiting until the power goes out.”

Ideally, says James Barnash, a certified financial planner with SGL Financial, you would have a plan in place and would have researched your bank and its full area of coverage in your state and out. If you have investment accounts, these should be included. Of course, it is best if you can have a way of remembering certain portions of account numbers, logins or passwords so they aren’t all in this bag if you lose it. You should have 800#’s, account numbers and passwords stored in something water proof that you can quickly grab and throw in a bag if you must evacuate. You should be able to fit your wallet(s) with driver’s license, other id’s and credit cards in that bag, as well.”

Sherry | | Comment #1
Great information!
paulaj | | Comment #2
Great and timely article. Aware of some of the suggestions, but barter suggestion was new for me. Thanks again.
Bill | | Comment #3
Thanks for the info....food for thought.
#4 - This comment has been removed for violating our comment policy.
deplorable 1
deplorable 1 | | Comment #5
I'm a rustic camper so power interruptions don't really scare me too much. I have multiple solar powered lights and chargers, battery powered tv's and radio with manual crank charging and a power inverter for changing the DC power in your car to AC. All you need is some food, a good cooler and a good old fashioned charcoal grill. I figure if there is a really bad emergency I'll just drive until I find a place that has power and use credit cards. It seems a little paranoid to keep tons of cash and food around. I could probably survive for 6 months just with the food I already have laying around the house anyway. I have a trailer always ready to go for camping trips anyway I could just take the family on a vacation trip for a few weeks in case of a emergency. I could never understand why the heck people choose to stay at home when a class 4-5 hurricane is coming, I would be long gone a week ahead of time. Many rustic campgrounds are only $5-$15/night.
Bozo | | Comment #6
Deplorable 1, I share your comment about evacuating when a Category 4 or 5 is bearing down. The winds are bad enough; the potential storm surge even worse. The financial "hit" to Floridians (and Texans, for that matter) will be incalculable for as far as the eye can see. The personal loss (in terms of death and injury) shocking. Governor Scott of Florida nailed it when he basically advised that folks in single-story homes in an eight to fifteen-foot surge, who have stayed in their homes, will drown.
Bozo | | Comment #12
Better news (perhaps) this evening. The storm surge on the Western side of Florida appears not to be as bad as predicted. A drone video from a person during the eye in Naples shows mostly wind damage. While that comes as little comfort to those who suffered wind damage, the insurance issues are much less complicated. On the Eastern side of Florida, especially in the Miami area. flooding appears widespread. Even for those with flood insurance, claims will be a slog.

As an aside, for those who might criticize Governor Scott, or FEMA, or the media, for "hyping" this storm's potential, I would invite your attention to the pictures of total devastation in the Caribbean. In addition, damage reports from the Keys are still coming in, but it would appear some islands really got hammered.
Dunmovin | | Comment #13
Luv those Anti-Deficiency loans!
Bozo | | Comment #14
Dunmovin (re comment #13) do anti-deficiency laws apply in either Texas or Florida?

Even here in California, anti-deficiency laws are a minefield. Folks who re-finance and do a "cash-out" are only protected "to the extent" of their purchase-money mortgages. For many, that can be woefully insufficient protection.
Bozo | | Comment #15
Example (further to my comment # 14): Let's assume Joe and Jane buy a home back in 1973 for $180,000. In 1983, they re-finance and increase the loan amount from $120,000 (the loan in 1973) to $250,000. Then, again, in 1993, they refinance again, and increase the loan amount to $400,000. In 2017, they hit "rough skids", can't pay the mortgage, and turn in the keys to the lender. How does the California anti-deficiency law apply? Theoretically, Joe and Jane are personally on the hook for $400,000 minus $120,000. Anti-deficiency laws (even if they exist) can vary from state-to-state. Heck, in some states, the simple act of re-financing can wipe out anti-deficiency protection, as a 're-financed" loan is not a "purchase-money" loan.
Dunmovin | | Comment #19
Either the new loan is entirely non-recourse or otherwise. There is only one loan and it could be with a new lender
deplorable 1
deplorable 1 | | Comment #16
I'm wondering if homeowners insurance covers these folks or if the insurance companies can get out of paying if it is a natural disaster? If that is the case then why are we paying sky high homeowners insurance rates only to be denied claims when we really need them. Thank God I don't live in the hurricane zone that damage looks awful. I'm wondering if flood insurance even would cover them.
Alex P. Keaton
Alex P. Keaton | | Comment #18
Yah no kidding. I hope those fools whose houses blew down the street enjoy using my insurance premiums.
Ann | | Comment #24
Flood insurance is run by the federal government and covers any damage caused by 'rising waters'. Anyone who actually bothered to buy it is covered. About three-quarters of flooded homes in the area impacted by Harvey did not carry flood insurance, because they weren't officially considered to be in a floodplain (based on outdated/incomplete calculations) so they weren't required by their mortgage company to buy it, or else they already paid off their mortgage and dropped flood insurance because they were no longer forced to have it, or they were renters and didn't think about protecting their personal property. Flood insurance is very reasonably priced, but just look at how many people only buy the mandatory minimums on auto insurance to see how little people plan ahead about stuff like this when they're not forced to.

Windstorm insurance is run by the state government and covers damage caused by wind and wind-driven rain. Except in the Corpus Christi area, most of the Harvey damage was not of this type.

Regular homeowner's insurance covers damage caused by broken pipes, falling trees, lightning, fire, etc. For any of the damage that is covered by this type of insurance that involves water, many such policies now exclude coverage for mold remediation unless you've been paying extra for a rider to re-include that coverage.

Some people who are fully insured will still have difficulties due to the insuring entities wanting to debate how much of the damage can be attributed to which cause.

Those who have flood damage who did not have flood insurance will be given some modicum of charitable assistance until those organizations move on, a few weeks of temporary housing assistance, and access to low-interest loans via the federal government for rebuilding. Those who can't afford the loans will become renters or move in with relatives.
Bozo | | Comment #27
Ann (re comment #24), I have been noting the difficulties of "concurrent causation" and insurance for quite some time. Homeowners' insurance covers wind, but not flood. Flood covers rising water, but not wind. So, if a homeowner has both homeowners' insurance and flood insurance, the homeowner might reasonably expect the two carriers would just get together, carve up the percentages, and cover your loss. Regrettably, it doesn't work that way. Victims of Hurricanes Katrina and Sandy found that out. Victims of Harvey and Irma soon will.

My solution (a multi-peril policy) met with little support here at DA.
Dunmovin | | Comment #28
Ann, unless and until the lenders move to have a viable insurance market, borrowers need to be aware of their options in a state mandated "absence" of that market. For example, if in earthquake country then pay little down if in a state that has Anti-Deficiency Act legislations (Calif is among the few). Another, what happens after buying your house major defects are discovered? Same analysis. At the end of the day "if people start walking" in those states, the lenders will be motivated to change the calculus!
Att | | Comment #7
Good to have cash but better to fill your gas tank and stock up on supplies before a storm. If the supermarkets are empty or closed and no gas at filling stations your money is wortless.
Alex P. Keaton
Alex P. Keaton | | Comment #17
Well you can be like the animals living on St. Maarten, they're looting all the stores looking for food. Don't those morons know to buy in bulk?
??? | | Comment #20
In the US they're looting shoes
Ann | | Comment #25
'Looting' was minimal, much less than the typical crime rate per day in any given city/town that was affected by Harvey.
Bozo | | Comment #29
???, re comment #20. I had to chuckle. The power's out, the police are hunkered down, and the idiots loot a Foot Locker for tennis shoes. Meanwhile, their activities are being videotaped by a local news crew. This is a "made-for-TV" episode of "Cops". As the theme plays in the background "bad boys, bad boys, whatcha gonna do when they come for you, bad boys."

Try pleading to misdemeanor stupidity.
??? | | Comment #30
#29 Yes Bozo, after seeing the crew, they looked like they started doing a Benny Hill / Keystone Cops routine.
luvfreestuff | | Comment #21
but you have to love all the free legal advice and nostrums that will fill the threads, scrolls, forums, chatr ooms etc,,,,all over the net when a tragedy stikes,,,,,it doesn't wash much when you are not made whole or even half....better to live in central indiana,,,safe and sound, dull and boring.
but for God's grace
but for God's grace | | Comment #22
on this holy day of remembrance and present day act of nature tragedy,,,YOUTUBE; a video entitled, DO YOU KNOW WHERE YOUR TREASURE LIES,,,,,it works for the fortunate.
#8 - This comment has been removed for violating our comment policy.
jennifer | | Comment #23
I simply adore handbags. I plan to look into these new ones.
deficits don't matter
deficits don't matter | | Comment #26
,,always check ebay and etsy for killer deals in leather bags for men and women
paoli2 | | Comment #31
"Bug-Out-BAG??" The writer of the article probably has never actually had to "run" from a hurricane which changes course and heads for where you finally got a room so your family is thankful you booked rooms in "all" directions you figured it might go! Soooo do you really think all you need is a "bag" for that trip? More like the safest and biggest metal box you can buy and stuff it with as much CASH as you can get out of the banks in time! I would not trust my money to a bag in times like these. I lost my paid up home to Katrina but thank goodness she couldn't pry my "can" out of my arms!
just askin
just askin | | Comment #32
in the end were you make whole or half for the house settlement, and what about the furnishings and valuables inside,,,,,if you will, i suspect most people end up sucking air for all the possessions inside the house that are lost.. thanks.
paoli2 | | Comment #34
just asking: We had a weird case and there was no settlement from FEMA or our homeowner's insurance. Homeowner's wouldn't pay a penny since they insisted it was a hurricane that caused the water to enter the house and our plumbing to be destroyed. FEMA refused to pay because the water has to be so high inside the house and unfortunately the land the house was built on subsided and caused the house to tilt over and the majority of the water poured "under the house" caused the house to tilt over and destroy $35,000.00 of plumbing! I don't want to take up time on DA to go into details but we ended up giving away a fortune in items in the house like furnishings, appliances, piano and everything that water did not destroy due to the $5,000.00 of Dade County Hurricane Shutters which kept most of the water "under" the house and unfortunately gave the insurance companies the excuse they needed not to cover anything! But life goes on in our apartment in a city we never expected to be living in which we hope will never be in any Hurricane's path.
Anon1234 | | Comment #36
Paoli, so sorry to hear what you and your family had to go through. Katrina saved its worst for New Orleans, and that is certainly the city most people associate with it, forgetting that it first came ashore in southeast Florida and caused substantial damage in south Miami-Dade County. I am glad you and your family were able to make a fresh start even after the emotional and financial effects. Thanks for sharing your story.
a. jesuit
a. jesuit | | Comment #33
RE NATURAL rDISASTER,,,,,trump was to drain the swamp...RIGHT INTO HIS CABINET AND CIRCLE OF ADVISORS....steve munchkin, & gary cohnfinger of goldfinger saxaphony and wilbur,,,USDA BEEF FOR CHINESE FRIKKEN CHIKIN ross,,,SUCH A DEAL,,,we really chumped those CHICOMS ON THAT DEEEUHL, where are the industrialists and manufacturing execs that used to be part of the inner circle....ALSO,,,he's talking down the dollar,,,,not good for energy costs, but great for john deere and case navistar and boeing et al,,,,THOSE SALES GUYS SHOULD LEARN HOW TO SELL VALUE AND NOT JUST GIVE IT AWAY ON THE CHEAP DOLLAR,,,,TRUMP IS GETTING HARDER AND HARDER TO APPRECIATE,,,,but he is not the screeching old lady that most men would divorce in a heartbeat.
!!! | | Comment #35
It just goes to say: It's impossible to satisfy everyone.