Spooked about What Happened in Cyprus?

Everyday we hear about the banking developments in Cyprus, where bank holidays were declared and a “tax” on deposits is being instituted.  Depositors stand to lose a large amount of their accounts.

It seems preppers are not the only ones wondering about this – even at work, concerns about Cyprus are being discussed in conversations at the break room.   Seeing the long lines, reading accounts from residents makes you wonder if this can happen here, and whether your money is safe anywhere.

It’s not something to panic about, but certainly something to think about.   What can a regular person do to reduce your risk?  I don’t have any large savings to worry about, am not a financial expert, but a regular person observing what’s going on and looking at ideas.

Consider Where You Bank

Many people are thinking about moving to regional banks or credit unions.  They feel having a relationship with a smaller bank give them a bit more confidence in where they are keeping their cash.

Don’t Keep all your Eggs in One Basket

Don’t keep all your money and credit in one bank.  This is prudent to do even in “normal times.”  I learned this when my bank account got hacked and the bank froze all the accounts (savings, checking and credit cards) during a long weekend.  Now I have savings, checking and credit cards spread out among different banks.

Reduce Your Dependency on Debit and Credit Cards

Many people have ditched using cash for the convenience of debit or credit.  They just pull out a bank card for everything.  But what if you lose access to these accounts?  Even if you have direct deposit of your paycheck, get back in the habit of withdrawing the cash for your weekly needs:  grocery, gas, entertainment etc.  It seems inconvenient at first, but if you get into the habit, you will find out that you spend within your budgeted amount by using cash.  Lowering or eliminating your debt will benefit your finances and peace of mind in the long run.

Have Spare Cash Available

I’ve always recommended having a cash stash to tide you over in case you cannot get money out of the bank.  Even in “normal times” you should have enough cash to cover your needs for a few days.

Keep Hard Assets

Having emergency food storage, enough water, health and sanitation supplies for a few months will help you survive a bank holiday.  Imagine if you can’t get to your money using your debit or credit card for a time period, and think of all the items you need to survive.  Have a ready supply of these items on hand at all times.

Precious Metals

Keep a few gold and silver coins to diversify your financial portfolio.  Do some research before jumping in.  Save your nickels  or trade paper cash for nickels.  Buying coins minted pre-1965 is another place to start.  Don’t forget about your jewelry-they have value as well.  Jewelry is not as easily convertible to cash, but they can still be sold if you need cash.

Know Your Alternatives to Online Bill Paying

If you lose access to online bill paying, you may have to pay your utilities directly or through an authorized third party.  Many grocery stores have a customer service desk where you can cash checks for a small fee, and they accept payments for utilities and cell phone providers.

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