This is How to Keep Your Money Safe When SHTF

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Money will be completely worthless in a total SHTF situation, which is why preppers and survivalists stock up on supplies and learn valuable skills. However, it is rather unrealistic to think that all money is going to lose its value, and it certainly won’t happen overnight. For that reason, you’ve got to consider how you will keep your money safe when SHTF.

Will Money Still Have Value?

Throughout history, we’ve seen many examples of economic collapse on a grand scale. We all know of the Great Depression of the 1930s in the USA, but there was also the Price Revolution in 16th century Spain, the Medici Bank failure in the late 15th century, the Russian Revolution in the 1920s…

But we have yet to see a complete global economic collapse.

Despite scary headlines like Global Trade Is Collapsing As The Worldwide Economic Recession Deepens and Global Economy On The Verge Of Collapse As It Turns Down In An Already Bankrupt World, we aren’t likely to see fiat money (printed money) lose its buying power.

This doesn’t mean you shouldn’t be scared of economic collapse. Throughout history, we’ve seen many regional economic collapses, and many are occurring right now. Just ask the Greeks how they feel right about now.

While it is possible that all fiat money will lose its power, what is more likely (and has happened in the past) is this:

  • Hyperinflation will occur
  • Government will seize bank accounts
  • Businesses will shut down
  • Civil unrest will occur

With these things in mind, let’s look at how you can keep your money safe in case of total SHTF situations and economic collapse.

great depression economic collapse
Man begs in front of a bank during the Great Depression

Gold Is Not a “Safe” Currency

None of us can predict what will happen in a total SHTF situation. But, for me, it seems ridiculous to think that gold will continue to hold value after all the other world currencies have become worthless.

You can’t eat gold.

You can’t make medicine out of gold.

The only really useful thing you can do with gold is throw it at an attacker’s head!

Let’s look at some examples of complete economic collapse in history. One example is the collapse of the Weimar Republic in Germany from 1922 to 1923. In just one year, the price of bread went from 163 marks to 200,000,000,000 marks.

Did people start using their gold jewelry as currency? No. The entire country went on a bartering system. They traded services and goods.

As Trent Hamm recommends in his article about Why You Shouldn’t Buy Gold as a Hedge Against Devastation, if you want to buy a small amount of gold – go for it. But history tells us that we shouldn’t count on gold as a currency in times of crisis.

Image of a woman lighting a fire with bank notes (Weimar Republic, 1922)
Image of a woman lighting a fire with bank notes (Weimar Republic, 1922)

Diversify Your Currencies

Another example of economic collapse is what happened in Yugoslavia during the 1990s. In the two years between 1993 and 1995, prices increased by 5 quadrillion percent.  This number is a 5 with 15 zeroes after it! The hyperinflation got so bad that people literally wallpapered their homes with the money.

Once again, no one on Yugoslavia turned to gold as a currency. Instead, they started using German Deutch Marks (the Euro wasn’t invented yet) for currency.

hyperinflation in Yugoslavia
2 million dinar bank note from Yugoslavia

What can we learn from this episode? If you want financial security in case of economic collapse, you need to keep your savings in multiple currencies.

Today, I’ve got part of my savings in US dollars, Australian dollars, Euros, Swiss Francs, and Chinese Yuan. If one currency collapses, one of the others will still likely hold value.

*An interesting note about the Yugoslavia case: While some people had their entire savings accounts become worthless overnight because of the inflation, other people got lucky. For example, my Serbian friend told me how his parents took out a mortgage right before the economic collapse. Virtually overnight, their mortgage went from a huge sum to the same amount as a loaf of bread.   Few banks in the former Yugoslavia offer mortgages in dinars anymore for this reason. Loans are given just in Euros, which is seen as more stable.

Where to Keep Your Money in Case of Economic Collapse

Most people keep their money in banks. This is NOT the safest place for your money to be during an economic SHTF situation.

One of the things that happens during an economic collapse is that the government confiscates people’s bank accounts. They have also been known to confiscate property, including people’s homes.

Consider what happened during the Cyprus bailout agreement in 2013. The government seized money in accounts with more than 100,000 euros. It is estimated that 40% of privately-owned money was stolen.

Another thing that happens during an economic crisis is mass withdrawals from banks. Banks are only required to have a small amount of depositors’ money in reserve (3-10%). When everyone comes at once to withdraw their savings, the bank doesn’t have enough money to cover all of the withdrawals. This recently occurred when Greeks withdrew savings amid debt crisis.

I’m not saying that you should give up on banks completely. But, considering what happened in other economic crises, it seems unwise to rely completely on banks for keeping your money safe when SHTF.

bank run during economic collapse
Image shows a massive bank run in Berlin as people scrambled to withdraw their savings at the start of the economic collapse.

Where to Keep Your Money – Alternatives to Banks

So if banks are a bad place to keep all of your money, what are the better options? Here are a few options – but remember to use your own judgment and use these methods at your own risk!

At Home

Over at The Prepper Journal, there is an article about where to hide your money so others can’t find it. Pat recommends hiding your money in places like buried in your backyard, inside your walls, or in secret drawers. These are okay options for small amounts of emergency cash, but I wouldn’t trust my entire savings to be stashed away in my wall! For starters, what if there is a fire or flood? Not only is your home destroyed, but all of your savings too.

If you stash your money at home, please keep it somewhere safe from disasters. The best option is probably a fireproof and waterproof safe, which is well hidden in your house.

Safe Deposit Boxes

When the Cyprus government confiscated bank accounts, they didn’t confiscate the contents of safe deposit boxes. This doesn’t mean the government won’t ever raid your safe deposit box. But, if it comes to this, you will probably have advanced warning – such as that they will first raid bank accounts and then come for safe deposit boxes.

Credit Unions

Credit unions have a lot of the same problems as banks, but are generally more stable. The only major downside is that getting your money out of a credit union during a disaster scenario could be really difficult.

Best solution?

There is no single “best” solution for keeping your money safe during an economic collapse. The best solution is probably a combination of all of the above. Keep your money in different currencies in many different places. When SHTF, it is likely that some of your money will still hold value and be accessible to you.

+ Image credits:
Bundesarchiv, Bild 102-12023 by Georg Pahl; CC-BY-SA 3.0
NYC: National Debt Clock by Wally Gobetz; Found on Flickr; CC-BY-SA 3.0

Do you have a SHTF banking plan?  How will you keep your money safe?  Let us know in the comments below or join the discussion on Facebook.

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