Few names carry as much weight in personal finance as Dave Ramsey. His no-nonsense approach to budgeting, debt elimination, and wealth-building has helped millions get their financial lives in order. But does his advice hold up when it comes to preparing for real-world emergencies?
While Ramsey champions keeping money in the bank and using electronic payments, financial experts, preppers, and even The Wall Street Journal (WSJ) suggest that physical cash on hand is a necessary part of a well-rounded emergency plan. Let’s take a closer look at why Ramsey’s views might not be as foolproof as he claims.
Ramsey’s Take: Banks Are Safer Than Your Mattress
In an episode of The Ramsey Show, a caller from Boise, Idaho, asked Dave Ramsey how much cash was too much to keep at home. Ramsey, as expected, dismissed the idea of stashing large amounts of cash outside of a bank, immediately making light of the caller’s concerns. He joked about “cash under the mattress” types and sarcastically suggested burying money in a coffee can in the backyard. His main argument? Money is safer in the bank where it can be wired for big purchases and isn’t at risk of theft.
He admitted to carrying around $1,000 in his pocket for convenience but made it clear that he doesn’t believe in keeping large amounts of cash at home. According to Ramsey, the risk of robbery outweighs the benefits of having physical cash on hand. He also mentioned that he knows some people who keep $5,000 to $10,000 at home, but anything more, he argued, puts you in “prepper territory,” which he dismissed with a tone of condescension.
The Case for Cash in Emergencies
Ramsey’s advice might make sense in a stable, functioning society where banks and ATMs are always operational. However, the financial experts at The Wall Street Journal (WSJ) paint a different picture. In an episode of WSJ’s Your Money Briefing, personal finance bureau chief Jeremy Olshan and host J.R. Whalen discussed the importance of keeping cash at home in case of a natural disaster, cyberattack, or prolonged power outage.
They noted that if electronic payment systems go down, people will have no way to buy essentials. Credit card machines won’t work, ATMs won’t function, and online banking will be useless. The WSJ panel recommended keeping at least a few hundred dollars in cash at home, with some experts suggesting enough to cover one to two weeks of expenses.
When Banks Aren’t an Option
Ramsey’s approach assumes that banks will always be accessible and reliable. But history has shown otherwise. As WSJ’s Jeremy Olshan pointed out, prolonged outages during hurricanes and cyberattacks have rendered digital banking useless for days or even weeks at a time. People in storm-prone areas like Florida are well aware of this reality, as power outages and infrastructure damage can make it impossible to access money electronically.
Having cash on hand means being able to buy food, gas, and emergency supplies without waiting for the financial system to come back online. Contractors and repair crews, in particular, often prefer cash payments during disasters since electronic payments may be delayed or unavailable. In a true emergency, cash isn’t just useful – it’s essential.
Preppers vs. Traditional Finance Gurus
The divide between traditional financial advisors like Ramsey and the prepping community is stark. Steven C. Smith, host of Prepping for Prosperity, pointed out in a recent video that Ramsey openly dismisses preppers, often ridiculing the idea of preparing for financial and societal instability. Smith noted that while Ramsey’s approach works for those who are financially irresponsible, it falls short for people who understand the need for real-world resilience.
Smith also criticized Ramsey’s habit of ridiculing callers who question mainstream financial advice. The idea that keeping cash on hand is somehow irrational ignores the realities of economic downturns, bank failures, and even simple technical failures that can render digital banking useless.
How Much Cash Should You Keep at Home?
According to WSJ’s research, financial advisors and disaster preparedness experts agree that having at least a few hundred dollars in physical cash is a bare minimum. However, the actual amount depends on individual circumstances. If you live in a region prone to natural disasters, having enough to cover two weeks of expenses is a safer bet.
Smith emphasized that cash is just one part of an emergency plan. While Ramsey promotes electronic banking and credit use, preppers argue that financial independence requires redundancy. Having a mix of bank savings, physical cash, and tangible assets like food and supplies creates a more robust safety net.
Ramsey’s Blind Spot on Crisis Preparedness
Ramsey’s main audience consists of people trying to get out of debt and build wealth. His advice is solid for those looking to avoid financial pitfalls like excessive credit card use. However, his reluctance to acknowledge the practical need for emergency cash reveals a blind spot in his approach.
The WSJ panelists and preppers like Smith understand that financial preparedness isn’t just about budgeting – it’s about survival. When access to money is cut off due to an emergency, cash can mean the difference between being self-sufficient and being helpless.
The Illusion of Safety in Banks
Another flaw in Ramsey’s thinking is his overreliance on banks. While bank accounts are FDIC-insured, that doesn’t mean instant access to your money in a crisis. If a banking system experiences technical failures, cyberattacks, or even a temporary freeze during a financial crash, customers could find themselves unable to withdraw their funds when they need them most.
Keeping a reasonable amount of cash at home ensures that, even in a worst-case scenario, you still have access to basic necessities. While banks are useful for long-term security, they aren’t infallible.
A Middle Ground Between Ramsey and Preppers
Not everyone wants to go full “bunker mode” with stacks of cash hidden in every corner of their home. But dismissing the need for emergency cash entirely, as Ramsey does, is just as unrealistic. A balanced approach means keeping most of your money in the bank while still having a reasonable amount of physical cash on hand for unexpected events.
WSJ experts suggest keeping cash in a fireproof, waterproof safe rather than in random hiding spots. This ensures that it remains accessible but protected from theft, flooding, or fires.
Generational Differences in Cash Usage
One interesting point made by WSJ’s Jeremy Olshan is that younger generations are far less likely to carry or use cash at all. Many rely solely on digital payments, seeing physical money as outdated. However, in a crisis, this digital dependence could become a liability.
Older generations, who grew up using cash regularly, may have an advantage in emergencies. They understand the value of physical money and are more likely to have some stashed away. Younger people, on the other hand, might find themselves completely unprepared if electronic payments go down.
The Right Approach to Emergency Cash
Dave Ramsey has helped millions get out of debt, but his advice isn’t perfect. When it comes to emergency preparedness, his dismissive attitude toward keeping cash at home could leave people vulnerable in real crises. Experts from The Wall Street Journal and Prepping for Prosperity agree that physical cash is an essential part of any well-rounded financial plan.
Rather than blindly following one financial guru’s advice, individuals should assess their own needs. A combination of bank savings, accessible cash, and tangible assets provides the best protection against unexpected financial disruptions. In the end, being prepared isn’t about paranoia – it’s about prudence.
Mark grew up in the heart of Texas, where tornadoes and extreme weather were a part of life. His early experiences sparked a fascination with emergency preparedness and homesteading. A father of three, Mark is dedicated to teaching families how to be self-sufficient, with a focus on food storage, DIY projects, and energy independence. His writing empowers everyday people to take small steps toward greater self-reliance without feeling overwhelmed.