In an emergency, you need to have some cash available, not just credit cards. The entire banking system may be fairly stable, but that doesn't mean that your local money machine is going to be operational when you need it. A long holiday weekend, let alone a natural disaster, can empty most of the machines. You should have about $30 per person available at all times. This is enough to buy bare necessities if you are forced out of your home by a disaster. It may be peanut butter and jelly and tap water, but you won't starve.

Keep some of the money tucked away in the house for the big emergency, but everyone should carry some of it with them. From the time our girls were old enough to be out of the house without me or their father, they have carried an emergency $20 bill folded and tucked away in a pocket of their wallet. A good place for it is behind the card with the contact information on it. $20 is enough for a cab ride home from almost anywhere if the car breaks down or your designated driver gets drunk. Let them know that if they use their emergency twenty they need to tell you right away so you can replace it.

Have emergency money
 tucked away

Every so often, make the kids show you their emergency twenty just to make sure it's still there. If they have spent it, replace it immediately. They may get punished for misusing it or required to make up the money, but don't let them walk around without enough money to help them in an emergency. And don't forget the adults. Your emergency money needs to be tucked away too. Most of us frequently spend the last dollar in our wallet before we get to the bank for cash. Emergency money needs to be kept separate or it will not be there when you need it.

I keep some money in the cars too. The plastic tubes that miniature M&Ms come in are perfect for holding quarters. You can easily store about $10 in the glove compartment and it is really handy for parking meters. If you use coin-operated washers, keep an extra supply of quarters with your laundry stuff. Make sure you always have a full tube of quarters in reserve. In an emergency, it is easy enough to grab the tubes of quarters as part of your emergency cash.

Once you have everyone in the family supplied with some personal emergency money, then think about tucking away some cash in the house for disasters. Pick a safe place, make sure all the adults know where it is, and check it whenever you make the kids show you that they still have their money. Keep this cash in tens or twenties, and don't keep so much that it will ruin your finances if it gets lost or stolen. Remember, this is just to tide you over for a few days if the banks are out of service. Do not try to keep your life savings under the mattress.

You don't have to do this all at once. You probably can't get fully supplied with emergency cash from one paycheck. Start with the kids, since they don't have the credit cards or the checkbook. If you need to start with $10 and work up, do that. Eat the M&Ms and start taking the quarters from Dad's change jar. Plan to get the money put away over the next few months and then all you have to do is replace it if you use it.