A year or so ago, a friend forwarded me an e-mail from a woman who had lived through (by evacuating) that big old hurricane scare down in southeastern Texas. The gist of her e-mail was quite simple: stash some cash in small bills in case of an emergency! The e-mail’s writer was very clear in her reasoning. In her effort to flee her home with her children and make a day’s journey northwestward through the night, she found herself on the road with THOUSANDS of others (and without her husband who stayed behind to guard the family home). In an effort to purchase some basic necessities on the way, she found stores and gas stations were most often short-changed when it came to cash and she had to lay down some serious moolah because all she had were bills in larger denominations. A gallon of water that should only have cost her, say, $3 actually cost her $20 because that was the denomination she had and the store had no change at 3 a.m.! Her advice to others? Keep cash in small denominations on hand in case of an emergency. 
Imagine yourself moments after an earthquake has ravaged your area. What do you grab? Loved ones and pets, your emergency supplies, a couple precious family heirlooms, and you’re out the door. Where are you headed? Probably an emergency shelter. But of course, you are not alone! You have hundreds, maybe thousands of friends and neighbors heading in the same direction. While your emergency supplies may last you and your family for a day or so, changes are that most others are not as prepared as you are and at some point you, too, will have to rely on others for some basic supplies when those same supplies are beginning to run low. Imagine the benefit of having cash on hand. Or imagine yourself, like the woman I mentioned above, having to evacuate the area at a moment’s notice. The gas in your tank will only get you so far. The supplies you are able to quickly grab will only last so long. If phone lines are down your credit card is worthless, and ATMs simply will not work if there is no power. Cash is king and money talks!
In emergency cases, to avoid having to necessarily overspend, you’ll want to have smaller denominations. Experts recommend (e.g., creditbloggers.com) keeping a few hundred dollars in small bills in your home in case of an emergency. By small bills, think in terms of $1s, $5s and $10s. Bulkier than a bunch of $20s or even $100s, but they will no doubt go farther in a crisis! Of course, it’s OK to start small, but start now. I started stashing my small denominations at the end of each day and before I knew it I had several hundred dollars in emergency cash that was easily accessible. It was easy to do and I never even noticed it missing! (And when I needed change for a garage sale and had forgotten to go to the bank the Friday before, voila! I just had to make sure to replace it!)
Here are a few links regarding the benefit of keeping some cash on hand:
http://www.mainstreet.com/article/money/investing/think-you-have-enough-cash-emergency
http://www.thesimpledollar.com/2007/02/25/why-i-keep-cash-under-my-mattress/
http://www.askmen.com/money/investing_200/203_investing.html






