Cookie Jar Funds
So a funny thing happened last Tuesday. My husband has been having persistent back pains these past two weeks, so I planned to take a leave from work on Wednesday to bring him to the doctor for a much-delayed check-up. However, around Tuesday afternoon, my husband called to say that the pain level had risen from an annoying 2 out of 10 to a 10 out of 10 (a.k.a. I'm having a baby without anesthesia type of pain).
When I got home, we called for an ambulance and brought him to the hospital since he could no longer stand and walk himself to the car. The ambulance ride wasn't covered by my husband's HMO, so we had to pay Php4,000 cash for the ambulance transfer since they didn't accept credit card payments.
It was a good thing that I had recently received my initial pay (finally!) and had withdrawn money to be deposited in my savings account and to pay some bills, so I could easily cover the Php4,000 fee. But what if I didn't have money that time? Sure I could have withdrawn money from an ATM, but it's a fact of life that most ATMs will be offline when you need money the most. Which is why cash is still and will always be king.
I've talked ad nauseam about creating an emergency fund which should be able to absorb 5-6 months of your household expenses, but there's also something to be said about keeping a small amount of cash at home to answer for the emergencies that regularly pop-up in our everyday lives.
From experience, I think the right amount of cash to keep at home is Php5,000 since it's big enough to handle most household emergencies but not too big that you'll stress about getting robbed. Here are some examples of the everyday emergencies that will make you glad you have some cash stashed within easy reach:
Losing your wallet - it will take a few days to have your ATM and credit cards replaced, so your cookie jar funds will be your only source of cash during this time.
Dead car battery - this happened to us twice already in the past 3 years, and thankfully the second one was still covered by warranty. I remember raiding my "52 weeks savings challenge" jar to replace the car battery, which is probably why I have never ever completed that savings challenge.
Medical emergency- this recently happened to us and I was so glad that I had cash at hand because the ambulance company didn't accept credit cards and it would have been doubly stressful to have to look for an ATM machine while dealing with a medical emergency. I just found out that Lifeline, a private ambulance service, offers membership where you can sign up yourself and several family members for an annual fee and in return, you get discounted ambulance transport when needed. We used Aeromed but I don't know if it also offers membership plans like Lifeline.
Weekends and long holidays- ATMs are usually wiped out during long breaks thus the need to have cash at hand for necessities like food and quick road trips to the beach :)
For someone in need - I can only count in one hand the number of people that I would willingly lend money to, but when one of those people would end up needing some assistance I would gladly dip into my cookie jar funds and savings to help out.
Having a credit card is convenient and I can't imagine not having one at my disposal. But the bottomline is cash is king, specially in stressful circumstances, and it would do well to have the king on your side of the ring.