Monday, March 26, 2012
Emergency preparations, Part 6: Cash and Barter
In this article, I'd like to consider the usefulness of having cash on hand, as well as alternatives to cash for barter. Let's start with cash.
I'd always kept a few hundred dollars in reserve, in case of need, but during Hurricane Katrina in 2005 I found I didn't have nearly enough! (I wrote about it as part of the 'lessons learned' during that crisis.) My friends needed to cash checks, but their banks back in New Orleans were underwater and/or unable to communicate, so their accounts couldn't be verified. Local banks, overwhelmed by refugees from other regions trying to cash checks, were not very sympathetic. I ended up sharing my 'cash stash' with my refugee friends, so they could have enough money to get back home again. That taught me a valuable lesson.
Another aspect to keeping cash on hand is so that one can pay bills, buy essentials, etc. if the banking system is disrupted for any reason - for example, a temporary interruption in the telephone network or power supply, or a catastrophic event such as a hurricane or tornado. If their credit card machines are unable to connect to the major networks (Visa, Mastercard, etc.) to process transactions, merchants will simply refuse to accept credit and debit cards. If you want food, fuel, etc., you'd better have an alternative means to buy it!
This applies particularly if you have to 'bug out' - for example, get out of the way of an approaching hurricane. Gas stations, supermarkets, etc. along evacuation routes will be overrun by thousands of refugees like yourself, all trying to buy what they need - and most will not have cash with them. They'll tie up tills, customer service departments, etc. as they try to make their cards work, and argue with cashiers and tellers when they won't. If you have cash, you can walk in and out in no time, bypassing all the problems. The same goes for hotel rooms. If the hotel can't process credit card transactions, it might be reluctant to rent out its rooms to those who only have 'plastic money'. If you can put down a deposit in cash, you'll get a room ahead of those who can't.
Cash is also very valuable in dealing with emergency situations that may arise while traveling. Do you (or a family member) have a medical problem, and all the hospital emergency rooms are overwhelmed? Try riffling a few banknotes under the nose of a nurse in the nearest walk-in clinic, or a pharmacist in the nearest drugstore. Ask for quick assistance, with no insurance paperwork required. You'll get it. Engine trouble? Wave some cash in front of the nearest mechanic and bet him he can't have you back on the road in an hour. Remember, people like that also have to buy essential supplies for themselves and/or their families, and may not have access to much cash at a time like that. Your banknotes may represent a lifeline for both of you! If worst comes to worst, you might even need bribe money to get through a roadblock, or ease your path through bureaucratic obstacles. This is commonplace in many parts of the world, and in an emergency situation, it will almost certainly become a reality here too. You'll obviously need to assess the situation carefully, and be discreet, but there are times when a few bills, handed over along with your ID documents, may get you on your way quickly, easily and (relatively) painlessly. Been there, done that.
How much cash should you have available? That depends on your needs. My personal 'rule of thumb' is that you should have available enough cash to cover a month of your family's normal expenditure - all your purchases and bills, whether paid by check, or credit card, or in cash. If your overall monthly household budget is (say) $2,500, then you should keep that amount on hand in cash (storing it somewhere safe, of course). If you spend more than that, keep more cash in your stash. That may seem excessive to some, but it gives me peace of mind. I'll be able to pay bills for a few weeks if I have to, even if the banking system is disrupted: and if I have to 'bug out' somewhere, I'll have a decent amount of cash on hand to smooth my path to a safer place.
Remember that many businesses won't accept large-denomination banknotes, for fear of counterfeit currency. Even in normal times, many shops won't take anything larger than $20. For that reason, I recommend keeping no more than 25% of your 'cash stash' in large bills (for US readers, $100 or $50 bills). 50% should be in $20 bills, and the remaining 25% in smaller bills ($10, $5 and $1). I also recommend keeping up to $50 in coins, for use in payphones and vending machines. Even at the best of times, many of the latter can't accept or process banknotes properly because their 'readers' have become dirty or clogged through over-use. In an emergency, breaking into the machines to take what you need may seem justifiable, but it's still a crime. If a cop sees you, or someone takes a photograph of you and notes your vehicle registration details, you're going to be in the dwang over it. Much, much better to have coins available to buy what you need.
You may find yourself in an emergency situation where even cash money won't do you much good. Those who have essential supplies (e.g. gasoline, firewood, etc.) might not want cash - they can't spend it (because no shops are open, or they've all run out of supplies) and they can't eat it. On the other hand, they may need food, or a way to protect themselves from those who want to steal their supplies. If you can offer them food from your emergency stash, or ammunition for their guns, or something else they need, they may be willing to swap some gasoline or firewood for it.
For that reason, I suggest considering supplies that will be in high demand in an emergency, and stocking up on extra items in those categories. There are many possibilities. How about toilet paper? Sanitary napkins for the ladies? String, cord, twine, rope, wire? Containers for water and food - even zip-lock bags? Energy bars? Emergency ration bars (like this one, for example, which is approved by the US Coast Guard)? Candy or coloring books for kids? (Just wait until harried parents find they've no electricity available to run the TV or a DVD player . . . they'll barter anything for something to keep the brats occupied!) On the road, I suggest keeping a few basic tools to hand, as well as emergency supplies like duct tape, a rope strong enough to tow a vehicle or tie down a load, a tarpaulin for protection against weather, a can or two of gasoline, lubricating oil, an air pump that runs off your vehicle's cigarette lighter socket, and so on. Motorists in need will be very willing to make a deal for what they need, and you might be able to trade such supplies for help you need, too.
A final word of caution. If you are seen to have plenty of cash, or it becomes known that you have plenty of supplies that you're willing to barter, you're likely to attract unwelcome attention. There are always those who'll try to steal what they need or want. It's best to keep a low profile, deal with people you know whenever possible, and be prepared for trouble. Better to be safe than sorry!