so, i've talked about having a cash reserve in liquid investments to cover several months of living expenses in the event of an unforeseen change in employment status, and i think it's pretty clear and reasonable why such a fund would be necessary. there are even some pretty clever ways to do that with little or no money, if you decide to go that route.
another idea that i've been bouncing around is to keep more cash on hand. what?!? why would you want something turning into cat food or burning a hole in your pocket? the main rationale for this is in the event of an actual emergency (flood, hurricane, or other natural disaster) that takes out some part of the atm or credit network fails and you can't tap into those would be liquid assets? you may need cold hard cash to buy food, water, and other survival items for a few days or maybe a week to cover your living expenses before the world rights itself again.
now, i've flip flopped on this several times -- should a big crisis come up, who knows, maybe i'd be out there looting, or maybe cash may been seen as suspect, but i figure a couple hundred bucks stashed in the fireproof safe at home in small bills has at least some merit. and, honestly, there is something quite intriguing about having a stack of twenties in there. not quite gangster lifestyle, but pretty compelling.