Hello and welcome to Money Girls Quick and Dirty Tips for our richer life.

I'm your host Laura Adams. This show is about the best places to keep your cash safe,

yet still working hard for you. In the last episode I discussed the importance of building up an adequate emergency fund.

I think about emergency funds as serving the same purpose as a moat that surrounds a forder castle.

This water filled barrier fortifies and protects the

structure from invaders. Emergency funds can help keep our household

financially safe from harmful circumstances that might show up unannounced in the middle of the night as well.

The definition of an emergency is a sudden unforeseen crisis that requires immediate action.

So when we're talking about money that you put aside for an

emergency fund, there are some special considerations for the best way to

handle those funds. If we're ever faced with a situation such as the loss of a job or business, time is of the essence.

Emergencies just can't wait for a CD or bond to mature or for you to sell a valuable

asset. Emergencies also don't want to hear that your cash

may have shriveled up in a declining stock or mutual fund.

The bottom line is that emergency reserves are a special kind of short-term savings fund that must be kept

completely safe and secure for the unanticipated

predicaments of life. A useful emergency fund has three criteria. Number one, it should be large enough to get you through the

crisis. Number two, it should be easily accessible and three, it should be held in cash.

So where can you stash your cash for the best combination of liquidity and safety?

You could keep it in your mattress for the ultimate in accessibility, but that's too accessible

for most people. It might be too tempting to spend cash that you have sitting literally right under you.

And remember that cash kept at your home is usually not protected against theft, fire, or other damage.

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