Updated on 08.26.15

Why I Keep Cash Under My Mattress

Trent Hamm

It’s true. After all the financial advice I give out on this site, I keep a decent amount of cash “under my mattress” (actually, it’s in another secure place in my home, but it’s effectively the same thing). At first, this seems to fly right in the face of everything I preach on this site. Why isn’t this money at least earning 4.5% in a Capital One 360 savings account, if not earning a lot more in a mutual fund or something else? No, because this is a different kind of investment.

I keep a small pile of twenties in my home as my ultimate emergency fund. I keep this money on hand for the sole purpose of being available if I have no access to funds in any other way – in the event of an absence of electricity or some other essentials, a cash economy will dominate and I do not wish to risk being in that situation with no leverage to make sure my family has food, water, and protection.

Even though it’s not earning anything, I view this money as an investment. It’s an investment against the unexpected – situations where everything else has failed and I have no other options to turn to. Knowing that it is there provides a certain level of security that money sitting in a bank account somewhere can’t quite provide.

Is this necessary? Let’s step back to Labor Day 2005, when Hurricane Katrina basically wiped a major city off of the map in the United States. Let’s step back to the summer of 2003, when much of the northeastern United States blacked out, many areas for weeks. What about the San Francisco earthquake of 1906 – I do live near the New Madrid fault line, after all. I’m only mentioning domestic disasters so far – what about the tsunami of 2004? The dozens of devastating earthquakes in recent years?

The fact is that such disasters happen, and quite often you have no way of knowing these things are coming. To not be prepared for them on some level is a poor choice, the type of choice that leaves people in situations of desperation, like those poor souls who inhabited the Superdome after Katrina.

I view the pile of bills under my mattress as an insurance policy against such a disaster, so that I can get my family the things that they need or at least get us to a place where we can get the things we need. If you live in a disaster prone area, there are home insurance policies that can prepare you for disaster. Is this the right thing for you? That’s a question you’ll have to ask yourself – it comes down to whether or not you feel that such preparation for a relatively slim possibility is worthwhile. Is it? Give it some thought today as you go through your activities – and put a few twenties under the mattress tonight if if feels right to you.

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  1. Eli says:

    If it’s not under the mattress, where is this “secure place in your home” and what’s your address?

  2. Jessie says:

    Very interesting post. I was debating this very issue over the past few weeks. I was in the middle of the black out that you meantioned above. I had just graduated college and started a new job. I also had about $20 in cash on me. I could not buy what little water I could find and I was half out of gas. Lucky for me, a family friend took me in at thier house for the duration of the black out. However, I may not always have those resources and now that I own a house, it becomes more pressing.

    I think this is very important for everyone to consider and I will most likely be creating a small at home fund this coming week. Sometimes pure safety cannot quite fit neatly in with personal finance.

  3. Jim Lippard says:

    If your purpose is disaster preparation, there are other things that are probably more important than cash. Miserly Bastard’s blog had an extensive multi-part series about his emergency preparedness kits–one that he keeps at the office, and a more extensive one at home

    If you keep cash at home for disasters, remember that (a) cash is rapidly losing its value and (b) prices will inflate further in the event of a disaster.

  4. Tim says:

    having lived abroad in several different countries, this is norm for us. If you are in high risk areas travelling and need to ensure you have a way out (believe it or not, the Embassy does not pay to get you out, although you can repay them later or on those rare occasions like Lebanon this past year they make an exception) or high risk states for natural disasters, you cannot get to a bank (if it is even open) or atm (if the electricity is running). When we are living abroad, we have two things to ensure a way out of the country: rolex watches and cash (depends on which country for how much).

    Jim, yes, cash loses value sitting there as a result of inflation, but if you are in a high risk area, it is better to be safe than sorry. You don’t have to keep it out all the time, you can keep some out in low probability periods, and max out in high probability periods.

  5. db says:

    I think we should all behave as if we live in a high risk area. Trent, this is one of the wisest moves you could make.

    Yes, you might get robbed. Yes, inflation is eroding the value of your money (it is doing so wherever you have it so that is a moot point.) However, if there is a local disaster or emergency it may well be the only money you can get your hands on. In times like that your credit card may well be worthless (but keep a special credit card with your cash stash too — one with an open line of credit.) Emergencies are also why its good to have some cash on you when you are away from home.

    Katrina and 911 should teach us to prepare to take care of ourselves in an emergency.

  6. John says:

    Similarly, I consider my el-cheapo pawn shop 12ga pump shotgun a solid investment.

  7. Debbie says:

    I put together a similar ultimate emergency fund in preparation for Y2K. I keep mine in mostly ones, a few fives, and some quarters so that I can give people exact change.

    Now that the Y2K uncertainty has passed, I still keep the fund, but I use it more as a cash-flow fund than as an ultimate emergency fund. I mainly use it when it’s time to refill the water bottles and I need quarters, or when several restaurant dates get scheduled back to back and I like to be able to pay my own portion with exact change.

  8. david says:

    I agree with the idea of keeping cash in the house as well as keeping supplies like water, food, batteries, fuel, etc etc in case of a big emergency. If the crap hits the fan and you have to stay in your house or bug out, you will want money AND food to help you out, as I doubt ATM’s and banks will be much help. Even if water becomes $20 a liter, at least I can still buy some when I run out of my own that we already have in the house!

  9. plonkee says:

    No, I don’t keep cash in the house at all. I generally have between £5 and £30 in my wallet all the time, but thats about it.

    I don’t think that a major disaster is particularly likely to happen in the UK. I could get flooded out of my home in a storm, they could seal off my street because of a terrorist threat or there could be a major power cut.

    Any of these would be quite localised. It would be possible for me to get to somewhere that would accept a cheque or functioning civilisation (electricity) quite easily. Its a small country.

    If I had money in the house, I’d almost certainly spend it. Which would be unhelpful in an emergency.

  10. John Stamos says:

    Seems like a waste to me. I lived outside of New Orleans during Katrina and still do… If you were stuck in the Superdome/Convention Center during the storm no amount of cash was going to get you out of there any faster. Cabs weren’t out front looking for the biggest pile of cash possible.

    I would have been nervous if I was stuck at the Superdome/Convention center with my family waiting on the Government to “take care of me”, but imagine if I had $3,000 dollars in cash in my pocket and somebody else there realized I had that money. Then tell me about scared.

  11. Trent Hamm Trent says:

    Instead of winding up in the Superdome, you would take about $500 of that cash, walk up to a National Guardsman, say that you’ll give them some cash in exchange for a ride out of there with your family, and hand them some cash up front. I’ve been in those situations (the Mississippi River flood of 1993) and I know how quickly a solution can appear if you start passing out Benjamins.

  12. VG says:

    So, how much to keep in the mattress then? I keep a $800 limit CC in my truck just incase i need a tank of gas or whatever and forgot my wallet. Keeping some cash in an easily reachable place is a good idea, but how much?

  13. Henry says:

    While I agree that there should be some cash on hand in the home, I don’t think that in the case of a huge natural disaster that it’s going to help at all. In the case of Katrina, it destroyed whole city blocks and would have taken your emergency cash with the whole house! There’s just almost no way to prepare for any huge destructive disasters. Emergency cash won’t help in those situations.

  14. Shannon says:

    I try to keep a few hundred in cash at all times. I didn’t like the “under the mattress” idea, so I bought a little firesafe that’s bolted to floor.

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  16. Lisa Knight says:

    It is amazing how fast your options run out in a disaster when you don’t have cash on hand. I seriously doubt that all the generators purchased during Buffalo’s “Surprise Storm” were put on credit & with out electricity & the ability to drive where there was some Cash was King!!! BTW when there is no power, there are no ATMs, gas pumps, fresh food… There is a reason so many people prepared for the Y2K thing. Life would have been really bad if the what if had happened.

    I started our new emergency kit this year & I intend to have cash on hand by the end of the year. The key is not to tell anyone else where it is, or the next time a girl scout comes to the door we may have $100 in cookies…Got Milk???

  17. Tim Phelps says:

    Your point is noted, but where do you stop? If you leave money at home, what if something happens there? Shouldn’t you leave money at work. Shouldn’t you hide money in a city park at the top of a hill? And a valley? Just in case?

  18. Taisch says:

    @ Tim Phelps
    Yes, as now you have options. Doesn’t that seem better than NO options? And, if you DON’T prepare, where do you stop? As you saw from the Katrina debacle, Uncle Sugar doesn’t have YOUR wellbeing as it’s foremost interest.

  19. mona says:

    i do this. and i was glad for it last october when the kona earthquake on the big island of hawaii knocked out power in all of greater honolulu most of the day. it just made getting food and supplies a little easier.

  20. Wil says:


    Maybe it’s not so crazy to have ready access to some cash in a few places. Not too much cash, and not in too many places, but why not? I’ve long advocated keeping $100.00 bill on your person, because there are some circumstances where you just won’t be able to use credit cards, and $100 will allow someone to eat if stranded, or get a place to sleep, or probably even transportation to somewhere less hectic.

    On a personal note, I have some traveler’s checks stashed in several places (home, family house, or other places where I have secure access and that I frequent). The receipt and information for placing stop payments and getting replacements are locked away where they can be used if needed. I know its paranoid, but you never know…,

  21. Jake says:

    It’s a smart idea, no question. I don’t do this, but we need to.

    One thing I would offer up, however… my dad always did the same thing you did. But he did/does it in smaller increments. As he always said: “If all you have is $20 denominations, everything costs $20”

  22. Sil says:

    You don’t need a natural or city wide disaster to see the benefits of an emergency stash of cash. Having some cash hidden at home has helped me in a number of situations. For example:
    – Getting locked out of my house at 2am in the morning. A phone call to the local locksmith will have someone arrive to let you in, but they can only take cash payment while on the road.
    – My father going on a vacation for a month and forgetting to pay his bills. He arrived home at 11pm and all the electricity had been turned off by the electric company. They were willing to send a service rep over right away to turn the electricity on, but once again, cash only accepted at that hour.

    So, two very strong examples of where going to an ATM would be troublesome and having cash on hand was helpful.

  23. Matt says:

    AMEN BROTHER! I was in Manhattan during the blackout of 2003, and I had no cash on hand. Since I wasn’t in the mood to walk 6 miles home in the sweltering heat, I stayed in midtown over night and basically had to rely on my charm and wits for food.

    How did I end up eating? I volunteered to stand in the pizza line for over an hour so that my friends could hang at home on the couch. I scored the last two pizzas and actually feared for at least my wellbeing on my way out of there!

  24. Stephan F- says:

    If you want gold for a economic disaster, like Post-War Germany (doesn’t matter which one) or current Argentina, the best choices are plain gold jewelry like necklaces and rings. My parents and grand-parents made use of these are an alternative currency on occasion.

    Most people have a good idea of what they are worth as you see them for sale in every mall, unlike gold coins which very few people are familiar with. Most people see jewelry as more useful compared to coins.

  25. D. Allen says:


    I think keeping five $20 bills would make more sense than keeping a $100 bill any day. Why, you ask? because many places, such as smaller stores or gas stations will not accept large bills. Benjamins are sometimes looked upon with suspicion of being counterfeit. On the other hand, almost nobody would think twice about accepting a twenty.

  26. I keep a varying amount of cash available in my lock box; usually whatever cash I win at poker. That means I’ll have between $20 and a few hundred dollars at any given time, and I use that to keep from having to go the ATM more than once every couple of months when I need cash. It’s also there in case of emergency.

  27. Kevin says:

    I built my stash from cash I earned by recycling plus money I found on the street.

    Originally I earmarked the money to use to treat myself. I never thought of it as emergency money but it has come in handy when it would be really inconvenient to hit the ATM—paying the housekeeper or leaving for a trip or an unexpected emergency.

  28. Drav says:

    So did we decide on an amount? Are we talking $300 or $3,000 here?

  29. Trent Hamm Trent says:

    I think it depends on finding that right balance of risks that’s comfortable for you. As for me, I have about $300 in cash hidden away.

  30. MS says:

    Having a couple hundred dollars sitting around isn’t going to make any difference from a lost-interest standpoint. Hopefully, this wouldn’t pose too much of a hardship in the case of fires, floods, theft, etc.

    While I’m hardly an alarmist, I do realize that our system (electrical, information, etc.) is not 100% fool-proof and that it’s smart to have a low-tech solution, like cash, for when there’s a hiccup.

  31. Mike Stankavich says:

    I also keep $300-500 in a fire safe. I keep it funded with craigslist sale proceeds. When it gets up over 500, I deposit the excess. I keep some singles, fives and tens in there so that I can make change as needed. I particularly liked the comment that if all you have is 20s, everything costs $20 :)

    For me, the convenience of avoiding unscheduled ATM trips and always having change if needed outweighs a few pennies of interest every month.

  32. martha in mobile says:

    Part of preparing for hurricane season is stockpiling a few hundred dollars. ATMs are down when the power is out and sometimes stores will only take cash.

  33. Cathy says:

    I’m with you on this one. We live in earthquake country and also keep cash in the house for emergencies. I think you’ve all convinced me to break the larger bills down :)

  34. carol says:

    I’m in full agreement with the posters who keep an ultimate emergency cash stash at home. Yes, there is always the chance that you might get robbed when away from home, but life is a chance.

    I have an all cash envelope system set up and keep it in a special box, that I keep in my back pack which I carry with me when I go out. I prefer backpacks to purses because they don’t scream “steal me” like a purse does and they are easier to keep up with.

    To me, a good idea is to have an emergency bug out bag ready to go, with cash tucked into a drawstring bag(coins, $1,$5,$10,$20’s). Have some real silver coins in case the paper currency becomes worthless. And most important, have that bug out bag stashed away where it’s out of sight, but instantly accessable.

  35. Rose says:

    I heard there is a limit to $$ at home; no person could have $5K in cash “under the mattress.” Is this true? I doubt if I would but I do keep a small amount of cash on hand as I went through the 1989 Loma Preda earthquake in SF area and so glad I had a small amount of cash.

  36. Bob says:

    Keeping cash at hand is one of the most important things a person can do.

    Keep in mind that the coming oil crisis (peak oil) will lead to a global economic crisis. It may hit suddenly, like the great stock market crash of the 20’s… or it might come slowly. Either way, it is coming.

    Even if there is only a 1 in 100 chance on the year that the global economy will collapse, doesn’t it make sense to be prepared? How much effort would it take to make sure that you have heat, water, food and cash if the economy fails? What would you do if the gas stations ran out, or you couldn’t afford the high prices? What would you do if the banks closed? What would you do if the electricity went out? How about all happening at the same time?

    The most important thing about having cash at home is that it takes time to retrieve. Imagine that you are a thief who knew exactly where the money was. If it takes 10 minutes to get to it, then it is probably not going to be stolen. Thiefs will toss your entire place, including the bathroom, closets, drawers, kitchen and etc… but if it is going to take them 10-minutes to get to it, you’re pretty much safe. Just don’t tell anybody (except your spouse) where it is.

    Peak Oil, if you are failing to prepare, you are preparing to fail.

  37. Jeff says:

    Growing up in Florida, I am all too familiar with an emergency kit or what we referred to as hurricane supplies. Yeah food, water, and petrol are great, but let me just tell you what I experienced recently. I lost my wallet. No big deal, until my banks told me it would take up to 10 business days to get ATM cards and credit Cards. At one time I was cash only. Then I started to slip into this reliance on ATM, CC, and computer wire transfers. This 10 days (more like 2 and 1/2 weeks) shocked me back into reality. I suggest either $500 bucks in cash or some gold buried in the yard somewhere. And if you do hide your money, ask yourself “would a kid steal this CD, bottle of beer, or bottle of pills before you go stuffing your cash in it!

  38. Tim Robbins says:

    I keep an emergency kit as well as a hand crank operated radio (with a cell phone jack) in my car. Once you run out of gas and your car stops running, you will STILL want to be able to hear the news or charge your cell phone (lap top?) without relying on electricity or extra batteries. Better to have this stuff with you in case you can’t get home right away.

    Sew some cash into the hem of a grody looking coat or other garment that isn’t likely to be washed very often (or stolen).

    Remember the movie “Shawshenk redemption”? Have some money (small bills, gold chains) buried in a location away from your home. Make sure its in a waterproof container and a spot where you won’t be visible to others while your digging it up. Use a GPS to hide (and find it again).

    What about food and water? What is you have nothing to eat or drink? What is you are unsure of the quality of what IS available? Campers carry small bottles of bleach so they can purify questionable water. Another very handy item to have would be one of those Hammacher Schlemmer handheld germ eliminating lights. They have a few sizes. One is the size of a cell phone and runs on two AAA batteries. (You DO have extra batteries for flashlights, etc. right?!) Hospitals use them to sterilize all sorts of things. You hold it over whatever food your going to eat for 10 seconds. It will kill Ecoli, Staph, Salmonella and other germs. God only knows what food will be available when things go south. Better not to get sick from food poisoning while your trying to get out of town. The hospitals will be too full to help anyway.

    “If all you have is $20 denominations, everything costs $20″.

    This is SO true. I recall during the blackout of 2003 that stores were charging big bucks for bottled water because they ran out of change. If you had a $20.00, thats what you paid for ONE bottle. Get a pack of 100 singles and some 5’s. Ask your bank for new money. Its stores more compactly than used bills. Pre-mark the bills with a counterfeit pen so it won’t be turned away by someone who isn’t sure if its legit or not. Your less likely to be robbed for singles than a stack of 20’s.

  39. vh says:

    Tampax boxes. I figure most burglars are male, and they’re none too likely to go scrounging through some woman’s sanitary supplies. That’s where I stash the negotiable instruments.

    Iodine tablets (available at your nearest sporting goods store) are a lot easier to carry around than bleach, and a lot less likely to make your water foam up like a sinkful of dishwashing water than Clorox does.

    Some of us keep a year’s worth of food on hand, in the form of canned and dried staples such as beans & rice.

    And if you live in a part of the country where you’re allowed to own one (and you know how to use it), in the kind of disaster our communal paranoia is summoning up here, a decent shotgun and a few boxes of shells would be worth a whole stack of benjamins. But if that scenario comes to pass, $500 in cash will keep the wolf from the door for a few days, and that’s it. Maybe as citizens we should work together to keep this sort of thing from ever overtaking us? Could it be that Americans should never let another New Orleans happen again?

  40. Macinac says:

    This is a big topic! In my cold state, a wintertime electricity outage could force me out of my home because the furnace is electrically controlled. I have not worked through all the other possibilities. I keep a few days worth of food separately stored. Some of this can be eaten without cooking (e.g. Spam). I know that the hot water heater contains 40 gallons of water, and I know how to get it out even if the water mains stop flowing. I have some flashlights and candles, a tight jar of matches, and that windup radio. I also have an old but serviceable Jeep Cherokee which gets terrible gas mileage but can be used on roads where the snow has not been plowed. I keep about $200 on hand, and a map of all the back roads in the county.

  41. viomatthe7 says:

    Once you’ve had a bank account frozen, keeping money at home becomes a brilliant idea.

  42. Garymc says:

    We are still recovering from Hurricane IKE’s aftermath here in the Houston suburbs where we were without power for ~4 days. Half of our neighborhood was without power for 9 days. NINE DAYS! Our roof was damaged enough to let the rain in which caused tens of thousands of dollars in damage. We’re still counting.
    Now here’s where the cash onhand plays an important role. When the rain finally stopped, roofers (Immigrants from Salvador) were offering to repair our roof on the spot….for cash. If it wasn’t for neighbors and the few hundred dollars in cash I had on hand we would have missed out on the opportunity for a quick fix to a real problem. They did a great job by the way. There were gas stations eccepting only cash for the first -few- days after the hurricane. Bottom line is you got to have an emergency stash of cash. Me? One Grand hidden in fire proof box in the ….

  43. Barbie Doll says:

    Besides–Uncle Sam will tax you so in effect, you are pissing money away by keeping it in the bank at 1.50% interest so US can get 20% or more in taxes. Makes sense to me to keep it under the mattress.

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