The recent disaster in Japan has had many impacts on the people of that nation. From a tsunami that caused tremendous loss of life and property to a nuclear disaster that is now being compared to Chernobyl, the Japanese have been hit hard. There have also been some interesting events unfolding in the weeks after the earthquake that show just how great the financial impact of the disaster is.
For example, among the items that are now being washed ashore are hundreds of safes. The safes are being held by police until their owners can be identified. Also, envelopes and other containers of cash are being found along beaches. Many of them do not contain any identifying information. The safes and loose cash that are washing ashore in Japan show us that many Japanese people were stashing their cash at home instead of keeping it in the bank. Some of the people that kept cash at home are elderly, and had been in the habit of keeping money at home for their entire lives. They are not comfortable with modern banking or with using ATMs. It was not just elderly folks that were keeping money in their homes, low interest rates did nothing to discourage the practice of keeping money at home among the general public.
It is my hope that the lost safes and money are reunited with their rightful owners soon. I’m sure that you know as well as I do that stashing money at home is not a practice that is unique to the Japanese culture. How many people do you know whose “financial cushion” is just that – cash stored in their mattress or elsewhere in their home. While many of us do not live in areas where our homes could be swept away by a tsunami, our homes could be destroyed by fire, floods, tornadoes, or other disasters or broken into by criminals. What’s more, your homeowners’ insurance may not cover the cash that you store in your home, or may cover only a very small amount. If you want to keep your money safe, the best place to stash it is in a FDIC-insured bank account.